How 'back to normal' crashed the stocks of some pandemic-era businesses


How ‘back to normal’ crashed the stocks of some pandemic darlings

The covid pandemic was one of the most volatile periods of stock market history. After dipping in early 2020, stocks roared back in late March as investors with spare money, spare time, and government stimulus checks bought up shares that then skyrocketed.

While many businesses that served the “in person” economy — especially smaller businesses — suffered or even closed up shop entirely, for many large companies, the pandemic was a time of increasing usage, revenue, and profits.

Some of these companies have maintained growing revenue to this day, but overall, investor enthusiasm for stocks has dampened thanks to the Fed’s interest rate hikes, high commodity prices, the strengthening U.S. dollar, and worries about a recession in 2023.

Work from home

Some of the most obvious winners of the pandemic boom were companies whose products and services brought in-person activity to the home.


The at-home exercise bike company Peloton’s revenue more than quadrupled from 2019 to 2021, but the company is struggling now. Its latest quarterly report showed a decline in members and a substantial — if narrowing — net loss after its founder left the company this year. Peloton, like some technology companies, was getting valued by investors as if pandemic era trends would continue indefinitely. Instead, its sales began to decline as people returned to gyms and lower-cost equipment entered the market. Last month, Meta founder Mark Zuckerberg said that he had expected e-commerce to continue to grow despite the return of in-person shopping following the waning of the pandemic.

In December 2019, Zoom had 10 million “daily meeting participants.” By April 2020, it was 300 million. Zoom no longer publishes the figure and its revenue growth has slowed considerably. Zoom has blamed its lowered forecasts for revenue growth on the strengthening U.S. dollar, which lowers the value of overseas deals as well as corporate clients applying “additional deal scrutiny” and taking longer to sign contracts.

Pandemic era but not pandemic-induced?

Another type of business that’s gone up and down but is still far more valuable than it was before the pandemic are oil, refinery, and mining companies, which have profited mightily from the spike in commodities prices following Russia’s invasion of Ukraine as well as the decline in America’s refining capacity since before the pandemic.

While some of these “pandemic businesses” have had pronounced rises and falls, enthusiasm for stocks and the resulting decline this year occurred across much of the market in late 2021 and throughout this year. The Nasdaq, which contains many volatile tech stocks, rose 67 percent from the end of 2019 to its peak in December 2021. It has since fallen more than 30 percent. According to Bespoke Investment Group, the stock market as a whole has lost almost $12 billion in total value since early 2022.

Tesla still sits above its pre-pandemic stock price — but well below the levels it reached in 2021 after a vertiginous rise, with the price going up over 700 percent in 2020 alone. While Tesla became profitable on an annual basis for the first time in 2020, that can’t explain the entire rise (and fall) of the stock. In addition, Tesla became a favorite of retail investors who wanted outsize gains from buying and holding the often volatile automaker and were optimistic about the company both because they believed it would lead the transition to electric cars and because of their personal affection for its chief executive Elon Musk.


The vaccine business

And then there’s Moderna, the biotechnology company behind one of the mRNA vaccines that have been distributed all over the world — at a handsome profit.

In 2020, the company lost almost three quarters of a billion dollars. In 2021, it made $12.2 billion, after delivering more than 800 million doses of the vaccine, its first commercial product, through the end of last year.

But when it comes to the stock chart, Moderna looks more like a volatile, profitless software company than a pandemic savior. Like many big gainers, its stock price peaked late last year and is tes 25 percent this year — better than the market as a whole, but still.

Stocks — even Moderna — have been hammered in the last year — especially those that were riding high in 2020 and 2021, thanks largely to interest rate hikes and economic aftereffects of the Russia-Ukraine war. The former have played havoc on many company’s stock prices, especially those that were producing small or nonexistent profits and were attractive to investors because of their potential growth.

Thanks to Dave Tepps for copy editing this article.

  • Matthew Zeitlin
    Matthew Zeitlin

    Domestic Economics Reporter

    Matthew Zeitlin is an economics reporter at Grid focused on the domestic impact of major stories such as coronavirus, the supply chain and economic volatility.