A nine-year-old video communication software provider is now worth more than an oil giant that can trace its founding back to John D. Rockefeller’s 1870 formation of Standard Oil.
The change in fortunes for Zoom and Exxon highlights how swiftly the Covid-19 pandemic has impacted the economy, and life in general.
Rolling shutdowns have seen schools and businesses rely heavily on the video chat software platform from Zoom to conduct daily life in a semi-normal state.
This led to a surge in business for Zoom, and helped power its stock higher by as much as 658% year-to-date. Within the first three weeks of shutdowns in the USA, Zoom added 100 million new customers, representing a quick double.
Exxon Mobil has been on the opposite side of Zoom’s good fortunes. The company has lost 55% in market value year-to-date, partly due to depressed oil prices.
Demand for oil has taken a hit as air travel nearly came to a halt in March and April, and has yet to recover to pre-pandemic levels. Economic activity as a whole slowed down precipitously, not helping oil demand, and a supply glut in oil also hurt prices.
Exxon is still feeling the pain. The company said today it would slash 1,900 American jobs as it implements a cost-cutting initiative that will see its global workforce shrink by 15% over the next two years.
So what could reverse the fortunes for both Zoom and Exxon? According to JPMorgan, a positive Covid-19 vaccine. The firm listed Zoom as a stock to short if the Covid-19 vaccine is developed.
A vaccine could lead to a swift return to normal life that would reduce reliance on Zoom video chats and help boost demand for oil as air travel and economic activity bounce back, or so the thinking goes.