The combined market cap of 15 listed online marketplaces and marketplace groups dropped by a total of USD 90 billion in the last 28 days
Written by Mr. Simon Baker of OnlineMarketPlaces.com
The last month has been a crazy month on the global stock exchanges. Across the board, shares in listed companies have plummeted by up to 60 percent – all driven by the uncertainty created by the Coronavirus. An analysis of 15 well known listed marketplaces and marketplace groups reveals that over USD 90 billion (or 38 percent) in value has been wiped off their market caps – over one third of their value just 4 weeks earlier. In local currency, the overall decline has been 41 percent on average, well above the decrease in the Dow Jones of 35 percent and the NASDAQ that has dropped 27 percent. When looked at on a stock by stock basis, Zillow is the worst performer losing over 55 percent of its value. Shares plummeted from a high of USD 65 to USD 29 as investors see problems with their iBuyer model in the current market. Not surprisingly, Zillow has paused its iBuyer operations while the Coronavirus plays havoc with the markets.
Three of the next four worst performers are number 2 or 3 players in their respective markets. Domain in Australia has decreased 52 percent in local currency, OnTheMarket in the UK has dropped 48 percent, and Lifull in Japan 46 percent. Clearly the market is factoring the movement of advertising revenues from the number 2 and 3 players to the market leaders as advertisers have less money to spend. Interestingly the Scout Group in Germany and CoStar in the US decreased by 23 percent and 26 percent, well below their peers. This probably reveals the strength of their underlying business model. It is clear that the Coronavirus is going to play havoc with online marketplaces around the world. The customers are either going to stop buying or stop paying, challenging cash flow and putting the pressure on management to steer their businesses through this challenging time.