Fears over the novel coronavirus outbreak and an oil price war led to the worst day for U.S. stocks since 2008 and a 15-minute halt in trading Monday.
- The Dow Jones closed down more than 2,000 points, or 7.8%. The S&P 500 fell 7.6%. International markets also took a hit.
- Seattle-based companies such as Microsoft (-6.8%), Amazon (-5.3%), Expedia (-5.7%), T-Mobile (-9.2%), Zillow (-9.2%), Redfin (-12.8%), Smartsheet (-8.8%), Avalara (-7.2%), Adaptive Biotechnologies (-8.3%), and Impinj (-7.2%) were all down, among others.
- The five most valuable U.S. tech companies lost $321.6 billion in market value, with Apple responsible for nearly one-third of that amount, CNBC reported.
An analysis from Daniel Li, a principal at Madrona Venture Group, noted that collaboration software companies such as Zoom and Slack have seen share prices increase over the past few months. Meanwhile, companies in software sectors including payments (relies on economic activity) and security (relies on in-person sales + implementation) have taken a hit.
Zoom’s stock was down on Monday, as well, but only 0.5 percent, faring much better than many other companies in the broader market decline.
“Given this coronavirus, I think overnight, almost everybody really understood they needed a tool like this,” Zoom CEO Eric Yuan said on an earnings conference call last week. “This will dramatically change the landscape. I truly believe in the future, everyone will [use] video for remote worker collaboration.”
Coronavirus Live Updates: The latest COVID-19 developments in Seattle and the world of tech
Microsoft has been aggressively marketing its Microsoft Teams software as an alternative to Slack and other collaboration tools, seeking to expand its market share in that sector.
Amazon is one of the companies that could benefit from the impact of the coronavirus, as work-from-home restrictions and other precautions cause more people to stay at home, relying on e-commerce for a larger percentage of their purchases. The company’s Amazon Web Services and Twitch businesses are among those that could benefit from increased online activity.
Redfin CEO Glenn Kelman said last week that agents in the Seattle area had seen “a significant drop in demand,” amid concerns about the novel coronavirus, but cautioned that the long-term trend wasn’t clear. “Redfin’s demand fluctuates plenty from day to day, especially in a single market, and this may only be a significant but short-lived reaction to the first serious virus infections on the U.S.,” Kelman wrote in a blog post. “It could also be more serious, and affect the rest of North America.”
Expedia Group said during its Feb. 13 earnings conference call that it expected the spread of the coronavirus to reduce its profits by $30 to $40 million in the current quarter, but that was before the potential for the disease to spread in the United States became clear. The company didn’t provide broader financial guidance for the quarter due to the uncertainty of the situation.
