2020: The Year Zoom Became a Verb and Other Musings

I doubt few will argue that 2020 has been a pretty awful year for all the obvious reasons, unless of course you are in the big tech industry.  In 2020, FAAAM, that’s Facebook, Apple, Amazon, Alphabet and Microsoft added over $12tn to their market caps as of November.  Netflix will close in on 200 million global subscribers by the end of the year and Tesla is now worth more than the eight largest vehicle manufacturers COMBINED!!  Tesla finishes the year with a market cap over $600 billion and is now the sixth largest company on the S&P 500.  On a typical day more than 200 million shares of Tesla trade to the tune of about $140 billion.

Tesla Model 3

While the world was in lockdown, 2020 still saw 65 companies go public with Airbnb being the star of the year, with a share price more than doubling on the stock’s first day of trading.  Airbnb, a company with few hard assets is now worth over $92 billion, more than Hyatt, Marriott and Hilton combined.  Is Airbnb really worth that much?  Maybe.  If you do the numbers, Marriott operates around 1.4 million rooms to Airbnb’s 6 million rooms.  Airbnb gets criticized by not actually owning any of those rooms so how can the company be so valuable?  Well, if you look again at Marriott, 60% of the rooms under the Marriott banner are franchised and on the company’s balance sheet it shows only $25bn in assets against $10bn in debt, so Marriott’s model doesn’t look that different to Airbnb after all.  So maybe Airbnb is in fact a deal trading around $160 a share.  Seems crazy but when you look at a traditional hotel chain’s trajectory for growth against Airbnb, those six million rooms can turn into eight million in a flash. 

In April 2020, so early days in our Covid meltdown, Microsoft CEO Satya Nadella stated that Microsoft had seen two years of digital transformation in less than two months.  That means in terms of tech adoption and advancement if Nadella said we were in 2022 in April, that means we must be in 2026 by now.

Yesterday, my home province of Ontario went back in to lockdown.  No shops, no restaurants and no fun.  Global bank UBS stated that in 2019, only 14% of all purchases were done online.  UBS now expect s that 31% of commerce, that’s almost 1 in 3 dollars spent will be done online by 2024.  Remember we are already in 2026.

And let’s not forget about Zoom that is now a verb just like Google.  Hands up if you had never heard of zoom in January 2020.  I sure had no idea on Zoom.  The company closes the year worth more than $100 billion and the share price has increased 475% in 2020 and revenue has increased 367%. Zoom was founded nine years ago but it took a pandemic to put the company on the map.

Yes 2020 has been an awful year, unless you are a tech company.