© Copyright Acquisition International 2025 - All Rights Reserved.

Article Image - Big Costs and Plummeting Share Prices Ahead for Companies Hit Hardest by Social Distancing
Posted 21st July 2020 • 2 min read

Big Costs and Plummeting Share Prices Ahead for Companies Hit Hardest by Social Distancing

This was particularly the case in companies with a strong connection to tourism, whereas, companies in the tech and communications sectors, were found to be hardly affected and will return to pre-COVID levels by early next year.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

Big Costs and Plummeting Share Prices Ahead for Companies Hit Hardest by Social Distancing
business effected by covid

Companies hit hardest by social distancing will face high premiums and shares falling, according to new research by Christian Wagner and Josef Zechner from the Vienna University of Economics and Business (WU) and their co-author Marco Pagano from the University of Naples Federico II.

The study found that in the viewpoint of investors, companies that feel the effects of social distancing the most, are seen as less resilient in a crisis, therefore premiums rose whilst at the same time share prices fell.

This was particularly the case in companies with a strong connection to tourism, whereas, companies in the tech and communications sectors, were found to be hardly affected and will return to pre-COVID levels by early next year.

At the beginning of April 2020, the expected returns of stocks with low pandemic resilience, such as Royal Caribbean Cruises and United Airlines are 40-60 per cent lower than those stocks with high resilience, like Apple and Microsoft where the expected returns were between 3-4 per cent lower.

“Sectors like tourism, which are more strongly influenced by social distancing, lost around 10% more value in the investigation period from February 24 to March 20 2020 than companies that were affected less,” says Professor Wagner.

The authors also analysed if investors were aware of the risks of a pandemic before the current crisis, therefore in addition to the first quarter of 2020, the authors included the years 2014 to 2019 in their analysis.

“In the period between 2014 and 2019, the cumulative differences in returns between more and less pandemic-resilient companies were about the same as during the outbreak, i.e. between late February and early April 2020. We assume that investors were aware of the potential threat of pandemics long before COVID-19 broke out,” says Professor Zechner.

The researchers say that it cannot be ruled out that the most alert investors may have started taking into account such concerns in their portfolio choices well in advance of the current pandemic, shying away from the stocks of companies that would be less resilient.

Categories: Finance


You Might Also Like
Read Full PostRead - Eye Icon
Bad First Impressions Drive One-Third of Consumers to Delete Apps
Strategy
03/12/2020Bad First Impressions Drive One-Third of Consumers to Delete Apps

ForgeRock®, the leading provider in digital identity, today announced the release of volume two of its global report, “The New Normal – Living Life Online.” The study polled 5,000 consumers throughout the U.S., U.K., Germany, Australia and Singapore to

Read Full PostRead - Eye Icon
42% of iPhone 6 Owners Have Tried Apple Pay According to Auriemma Consulting Group Survey
Innovation
12/03/201542% of iPhone 6 Owners Have Tried Apple Pay According to Auriemma Consulting Group Survey

The move to mobile payments in the US has finally begun.

Read Full PostRead - Eye Icon
Pensions Used as an Investment Vehicle for Good
Finance
17/08/2021Pensions Used as an Investment Vehicle for Good

Saving for retirement is a distant prospect that only becomes real the closer we get to it, wishing we had started to save seriously earlier. However, could this be about to change for many?



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow