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2020 Media Market Caps Point to Fragile Recovery

2020 Media Market Caps Point Fragile
Cheyne Gateley/VIP

To say 2020 was a challenging year is to put it lightly. The COVID-19 pandemic altered the way of life for countless people around the world, and as a result companies in every single sector and industry, including media and tech, had to find ways to adapt in order to survive.  

Despite all the unparalleled challenges, conditions have improved somewhat, and the stock market managed to not only claw its way back but get back to near record highs. While most companies recouped COVID-related losses, some didn’t fare quite as well. 

There are two ways of analyzing COVID’s impact this year. First is by assessing the major media and tech companies’ market value change from the beginning of this year until the end of December.

Perhaps most surprisingly, streaming company Roku saw the most impressive gains and surged a staggering 193% since January, outshining the tech behemoths due to the company’s strong momentum in user growth and ad revenue this year. Apple, Amazon and Netflix saw their market caps increase more than 50%, while AT&T and Fox market values sank by more than 20% compared with the beginning of the year. 

However, most of the COVID damage occurred in late March. Thus, looking at market value change from the end of March to the end of December illustrates a more accurate picture when assessing the post-COVID recovery for media and tech companies.

AT&T is the only company that did not fully recover from the pandemic-induced blow. The telecom giant’s market cap is down 2.6% between March and December, as the company continues to manage COVID pressures while having the weakest balance sheet in the industry and a hefty dividend obligation. 

Roku, ViacomCBS and Apple saw triple-digit gains, while the rest of the companies eked out double-digit gains from the market lows. 

All in all, things are looking better headed into the new year, especially when weighed against early April, when VIP looked at the initial COVID impact on the group. Tech- and streaming-focused companies were the biggest winners this year, but the main concern is sustainability of those massive gains.

If and when people start going back to the office and return to life as they used to know it, will the companies that benefited most from the pandemic continue to thrive? Truth be told, no one really knows how long the market will continue to climb higher, and some argue that investors should be worried given the high levels of uncertainty that linger in the market.

But 2021 will be remembered as the year the world started to recover. And for now, the fate of these companies and the world lies in the hands of the virus and vaccine.