Zoom founder drops $5 billion as vaccine hits Covid winners | HT Tech

Zoom founder drops $5 billion as vaccine hits Covid winners

The stock of the video conferencing site has soared more than 500% this year and Yuan, a Chinese-born immigrant to the U.S., was at one point worth $28.6 billion -- the 40th wealthiest person on the planet.

By:BLOOMBERG
| Updated on: Nov 10 2020, 07:54 IST
Zoom shares fell 17% in New York, erasing $5.1 billion from Yuan’s net worth.
Zoom shares fell 17% in New York, erasing $5.1 billion from Yuan’s net worth. (AP)

Eric Yuan is, in many ways, the poster child for the coronavirus economy.

His Zoom Video Communications Inc. has hosted school lessons, family gatherings and business meetings for more than 300 million participants a day during the pandemic. The stock of the video conferencing site has soared more than 500% this year and Yuan, a Chinese-born immigrant to the U.S., was at one point worth $28.6 billion -- the 40th wealthiest person on the planet.

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That remarkable surge took a hit Monday after Pfizer Inc. said the Covid-19 vaccine it's developing with BioNTech SE prevented more than 90% of infections in a study, the most encouraging scientific advance so far in the battle against the virus. Airlines, oil giants and hotel operators surged, but stocks that benefited from lockdowns and work from home arrangements, such as Peloton Interactive Inc., Netflix Inc. and online supermarket Ocado Group Plc, all slumped.

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The key question now is whether those extraordinary gains can hold, or whether people will stop using the services of companies like Zoom after the pandemic ends and they return to the workplace.

‘Normal Volatility'

“I don't think the trend around e-commerce, video collaboration or shift-to-cloud will change as a result of the vaccine,” said Bloomberg Intelligence analyst Mandeep Singh. “The valuations look rich for some of these names, but some of these are multiyear growth stories. This is just normal volatility as investors look to rotate into sectors that have been depressed due to the pandemic such as travel, casinos and hospitality.”

Zoom shares fell 17% in New York, erasing $5.1 billion from Yuan's net worth. He's sold more than $275 million of Zoom stock this year and is still worth $20 billion, according to the Bloomberg Billionaires Index. Peloton founder John Foley became a billionaire on the stunning rise in the home-fitness company's shares. He's down $300 million after the stock tumbled 20%.

FedEx Corp. Chairman Fred Smith's net worth dropped by about $250 million as shares of the express shipping company fell 5.7%. His fortune had surged this year by more than 70% through Friday as remote working and booming e-commerce boosted demand for package delivery services. Reed Hastings, chief executive officer of movie and television streaming service Netflix, saw his net worth decline by $416 million.

Jay Chaudhry, CEO of cybersecurity firm Zscaler Inc., Ocado co-founder Tim Steiner and Forrest Li -- the billionaire behind Sea Ltd., Southeast Asia's largest internet company -- also slumped in the fallout of Pfizer's vaccine study.

‘Ortega, Rowling'

Some firms and their billionaire owners are holding onto their gains. The fortunes of Zara founder Amancio Ortega and his daughter Sandra surged through their stakes in fast-fashion retailer Inditex SA as the vaccine study boosted hopes of consumers returning to brick-and-mortar shops. Hotelier Robert Rowling, as well as industrialist Georg Schaeffler and the Deichmann family who control one of Europe's largest shoe retailers also saw their wealth increase Monday.

Some firms are optimistic that even after the pandemic is brought under control, people will continue to use their services.

“How can anybody be tired of Zoom?” Chief Financial Officer Kelly Steckelberg said in a June interview with Bloomberg TV. “Video communication has been integrated into all aspects of our lives.”

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First Published Date: 10 Nov, 07:54 IST
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