© 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

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
Supporting Risk Takers
Finance
15/08/2023Supporting Risk Takers

With a passion for providing its expertise to organisations of all sizes around the world, TaxCoach is a trusted consultancy firm that offers a variety of financial services to help clients succeed in their endeavours.

Read Full PostRead - Eye Icon
Effective Strategies for Enhancing Employee Productivity in the Digital Era
News
07/06/2023Effective Strategies for Enhancing Employee Productivity in the Digital Era

As the digital revolution sweeps across every industry, the rules of the game are swiftly changing. With an array of technologies available at our disposal, the methods to boost employee productivity have evolved significantly.

Read Full PostRead - Eye Icon
Cloud-Based Management Systems Designed to Inspire and Empower
Innovation
07/08/2024Cloud-Based Management Systems Designed to Inspire and Empower

Enabling organisations through its suite of pioneering management systems, IQMS Australasia, offers a highly refreshing approach when it comes to management solutions.

Read Full PostRead - Eye Icon
5 Steps to Improve Your Chances of Obtaining a Business Loan
Finance
19/06/20235 Steps to Improve Your Chances of Obtaining a Business Loan

It’s easy to assume that lenders won’t consider your personal financial situation when you’re trying to obtain a loan for your business. After all, your personal financial situation might have no bearing on your ability to manage money in your profession

Read Full PostRead - Eye Icon
How to Start Cloud Mining Bitcoin Cash
News
13/06/2022How to Start Cloud Mining Bitcoin Cash

Cloud mining bitcoin is a valuable alternative to traditional mining. It’s an option that’s better suited to small and mid-size investors since it doesn’t require an initial investment in the equipment used for mining. Instead, the process takes place in

Read Full PostRead - Eye Icon
Why Legal Guidance Is Must-Have For Italian Dual Citizenship Aspirants
Legal
19/10/2022Why Legal Guidance Is Must-Have For Italian Dual Citizenship Aspirants

Italian dual citizenship is trending because the country has immense benefits for immigrants. Relocation to Italy opens up an incredible lifestyle where you get quality education, excellent healthcare, and opportunities to work in business or profession.

Read Full PostRead - Eye Icon
Haversham Holdings acquire BCA Marketplace 1.8bn USD
M&A
01/04/2015Haversham Holdings acquire BCA Marketplace 1.8bn USD

Haversham Holdings said last Thursday that it had agreed to buy the British used car auctioneer and reseller BCA Marketplace in a cash and stock deal for £1.2 billion, or nearly $1.8 billion.

Read Full PostRead - Eye Icon
Nuance to Acquire TouchCommerce, Accelerate Growth of Enterprise Business
Strategy
21/07/2016Nuance to Acquire TouchCommerce, Accelerate Growth of Enterprise Business

Nuance Communications, Inc. today announced that it has signed a definitive agreement to acquire TouchCommerce, a technology partner and leader in digital customer service and engagement solutions.

Read Full PostRead - Eye Icon
5 Urbanisation Challenges That Could Be Easily Handled by AI
Innovation
08/11/20225 Urbanisation Challenges That Could Be Easily Handled by AI

The world is moving faster than ever with billions of people on the move. In fact, by 2050, more than two-thirds of the global population will live in cities.



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