E-commerce does not meet expectations
E-commerce has been one of the big winners from the corona pandemic. Amazon stock price doubled between April and September 2020 and peaked at over $160 at the end of 2021. Online store software provider Shopify was even able to triple its share price by the end of 2021. However, this dramatic rise was followed by a drop in unprecedented price in 2022. Online sales although likely to continue to increase, but much slower than expected. In addition, the lack of consumer confidence and inflation have a negative impact on business. Investors are therefore currently withholding these papers.
Online payment services are among the biggest losers
The valuation of online payment services has also exploded in 2020. Due to the rapid growth of online transactions, they have excellent prospects to increase their market power. PayPal’s market value has grown from €127 billion to over €360 billion. And Klarna’s valuation has increased sixfold to more than 40 billion euros. In 2022 the great price adjustment has begun, both companies are now valued lower than before the pandemic. An additional factor contributing to this is the growing competition in the industry from Apple and Alphabet.
Online casinos under double pressure
Shares of companies specializing in online gambling are also under pressure. But the end of confinements is not solely responsible for this, because the number of people who Play with real money in the online casino, remained stable. The fact that the regulation of the sector is currently tightening in Europe is also contributing to the drop in prices. This depresses corporate earnings and dims the outlook. The price of 888 Holdings has collapsed more than 70% since the end of 2021. The equally dramatic looks Location at competitor Bet-at-home out.
Digital communication: But not everything
The course of the pandemic has also shown that digital communication does not fully replace face-to-face meetings. Video conferencing and working from home are now the norm in every business, but on important occasions people think of the conference room. And Mark Zuckerberg’s ambitious vision of a metaverse hasn’t caught on either. Meta stock has fallen more than 60% this year, and Zoom’s stock has taken a similar cut. Microsoft shares also suffered losses, but not to the same extent.