The impact of the Corona pandemic on companies between a beneficiary and a loser
The new Corona virus “Covid 19” has seriously put the global economy at stake, as large companies and economic entities have declared bankruptcy, and others are on the verge of bankruptcy.
The major airlines were the first victims of the pandemic, starting with the suspension of travel flights and the closure of airports and borders between countries to canceling thousands of flights, as well as oil, as it fell in general due to the low demand for it in light of the disruption of vital industrial sectors that depend on it.
There are other companies that have been affected, such as tourism and hotel companies, and companies working in the field of organizing sporting events, parties, and restaurants, forcing them to lay off many workers or reduce their working hours sharply, and many of these companies may not be able to survive and have to close.
Industry areas will also be hit hard as companies such as “General Motors” and “Ford” announce the suspension of their business in the United States, which will affect car assemblers, management workers and all auto parts suppliers and dealers may actually lose their business because potential buyers will not be inclined to buy. There will be job losses as the demand for vehicles decreases.
But is the scene so bleak? Wasn’t any sector out winning this battle? And what about the medical sector and pharmaceutical companies, whose global demand for their preventive products, such as masks and disinfectants, has become so great that there is a shortage of markets in many countries of the world.
Here comes the answer that the companies producing medicines and vaccines such as “Pfizer” have met a wild rise, as their shares rose simply for announcing the arrival of a new vaccine or working on solutions that might eliminate the virus, as the matter returned large profits to the owners of the shares of pharmaceutical companies and manufacturers of chemical protection products, whose share prices soared in global stock exchanges in conjunction with the spread of the deadly disease.
The same applies to telecommunications companies and TV services over the Internet, as they rebounded as a safe haven for communication after the imposition of social separation, as the number of users of Facebook’s social networking platforms increased by 15%, and online video service companies, such as Netflix, achieved unprecedented profits in light of the turnout of millions of people from For entertainment and recreation during isolation, the number of subscribers to the Netflix platform has jumped dramatically by 47% during the same period. This boom in the home entertainment sector is not surprising, as long as so many people have no choice but to stay at home.
American companies reaped the largest gains, as Amazon sales rose by 40% in three months, while Apple achieved a significant increase in sales of iPhones and other devices, and Democratic Congressman David Cicilline stated: “These companies are likely to become stronger and more powerful than ever before.”
Another giant of the entertainment industry is “Disney company”, which has gained something and lost another during the outbreak of the epidemic. Continuous streaming services for movies and series on the Internet frighteningly.
It is worth noting that despite the sectors that achieved profits and positive results, they are not commensurate with the size of the loss and damage to the global economy as a whole, as the extent of the damage to the global economy may be unprecedented. When the SARS epidemic broke out in 2003, China was the sixth largest global economy, as it used to contribute about 4.2% of the global gross product, and today it is the second largest in the world economy and contributes about 16.3% of the global gross product. Therefore, any health malaise in the sectors of the Chinese economy causes a shock in all sectors of the global economy.