It was a sunny day in March when news channels flashed a headline which shook the entire stock market. A leading company witnessed a significant drop in their market value and almost 50% of the capitalization got wiped off in a matter of days. It created a stir in the business world, and everyone was curious about what led to such a drastic decline.
Upon research, it was found that several other companies also faced a similar situation, and the overall market sentiments were bearish. The COVID-19 pandemic had affected the global economy, and the stock market was not immune to it.
Let's take an example of a popular company whose market value saw a decline amidst this turmoil.
Microsoft
Microsoft (MSFT) is a technology giant, and their stocks are always in demand. However, due to the pandemic, their operations were affected, and investors were uncertain about their future prospects. In September 2020, their market value dropped to $1.5 trillion from $2 trillion in just a month. It was a massive blow to the company, and they had to take various measures to regain investors' trust.
Another example is that of a leading airline company.
Delta Airlines
Delta Airlines (DAL) is a major carrier in the United States, and it faced significant losses during the pandemic. Due to travel restrictions and lower demand, the airline had to ground several planes, leading to revenue loss. In March 2020, their stocks plunged by almost 57%, and the company had to take measures like cutting salaries and downsizing to recover.
Such companies were not alone in their struggle, and almost every industry faced the heat of the pandemic. As a result, investors were wary of investing, leading to an overall bearish sentiment.
Conclusion
- The COVID-19 pandemic had a significant impact on the stock market, and several leading companies witnessed a decline in their market value.
- Investors were uncertain about the future prospects of companies, leading to an overall bearish sentiment.
- To recover, companies had to take various steps like downsizing, cutting salaries, and regaining investors' trust.