A recent report from AP News investigates how the Wuhan coronavirus pandemic has forced Silicon Valley’s most popular companies, including Airbnb, to face a number of harsh truths.
AP News reports that the Chinese virus pandemic has had a serious effect on the world economy, and the tech industry has reportedly realized that people’s freedom to travel and meet together was a key part of the success of the industry. Since the start of March, Uber shares have lost a quarter of their value, Lyft is down 28 percent over the same period, and the S&P 500 has dropped 10 percent by comparison.
Allen Adamson, co-founder of the marketing firm Metaforce and a business professor at New York University commented: “What market pressure will mean for all companies is survival of the fittest. If you are going into this storm in a bad shape, it’s not going to be pretty.”
AP News discussed the property rental platform AirBnB writing:
Just few weeks ago, Airbnb was poised to cash in on a soaring stock market with its highly anticipated public offering. But with the market now reeling and few people looking to anywhere but home, Airbnb is reportedly racking up millions of dollars in losses while fending off a backlash from hosts who rely on its service to survive.
Hosts were furious when the company told guests they could cancel their stays without penalties. Last week, Airbnb agreed to pay hosts $250 million to make up for some of the money lost to cancellations.
AirDNA, a data firm that helps property owners set rental rates, says the impact on U.S. Airbnb hosts has been mixed. In New York City, bookings dropped 66% in March, but in outer suburbs they were up as people fled the city. Bookings in Westhampton Beach, N.Y., jumped sixfold. Similarly, bookings in the city of Chicago fell 11% last month, but in St. Joseph, Michigan — a lakeside community within driving distance — they were up by a factor of four.
Some Silicon Valley firms have actually benefited from the pandemic, meal kit company Blue Apron was reportedly threatened with delisting from the New York Stock Exchange recently after its share price fell below $1. But since the beginning of March, company shares have more than tripled after a sharp increase in consumer demand due to stay-at-home orders.
AP News discussed the number of startup firms worldwide, writing:
Sanwal said he’s already seeing a decline in early-stage seed investments that help launch new tech startups. But he said investors who have poured big sums into unicorn startups will likely try to do what they can to help keep them healthy, at the very least by grooming them for sale rather than standing by as they collapse.
“Investors are going to make some hard decisions about whether this is a temporary downturn, or a company that doesn’t have a shot,” he said.
Read the full article at AP News here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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