The coronavirus crisis is likely going to last for months. Here are 5 key business stories to watch.
AP Photo/Mark Lennihan
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The team here, like many of you, have been jumping on Google Hangouts and Zoom calls to talk through what's going on, and to try and find the balance between managing for now and thinking ahead to what the world might look like three, six, or 12 months down the line. (Speaking of Zoom, the company has already had to warn investors that the app's huge boom in popularity is making it more expensive for the company to do business.)In the same way, our reporters are focused on the here and now, whether it's reporting on when the historic stock market selloff will end, what Microsoft chief Satya Nadella told his employees in a recent remote all-hands meeting, or the Trump administration working with the healthcare startup founded by Jared Kushner's brother to power a coronavirus tool.
You can keep track of the latest right here.But they're also looking ahead. With that in mind, I want to break down a few of the broader trends we're looking at. These were all evident before the coronavirus pandemic, but the current economic chaos looks set to be an accelerant. And I want to hear from you. We're here to help you navigate this historic moment. How do you expect the world to change as a result of the coronavirus pandemic? I'd love to hear from you.
For more on how newsrooms are tackling this moment, I'd recommend this story from The New York Times, which features our founder and CEO Henry Blodget and his cat Sookie.
The flood of easy money sloshing around the startup scene had been starting to drain a little already, as investors pulled back following a round of high-profile blowups, down rounds, and botched IPOs. Now, the plug is about to be pulled on many startups.A whole host of buzzy direct-to-consumer startups are now under huge pressure, for example, with unemployment set to spike and disposable income set to plummet.
Mike Duda, managing partner at hybrid accelerator agency and venture capital fund Bullish, whose investments have included Warby Parker and Peloton, told Lucia Moses and Tanya Dua for example:
"Funding will become harder. Businesses will shut down. A lot more investors will circle their current portfolio to make sure they can weather the storm."They report that the coronavirus threatens to crush direct-to-consumer businesses' wild growth. According to their reporting, startups like Hippo, Ro, and Tiny Organics are slashing ad budgets, offering free products, or ramping up content as they try and ride out the crisis. On the flipside, Megan Hernbroth reports that alcohol delivery and CBD-infused beverage startups are flourishing during coronavirus containment.
A related theme is that, as smaller and newer businesses get wiped out, some Silicon Valley giants could get even bigger. Rosalie Chan for example reported that Amazon, Microsoft, and Google could take advantage of the market downturn to go on a cloud startup shopping spree, according to some analysts.In Europe, Martin Coulter, Callum Burroughs and Shona Ghosh report that European investors and startups are bracing for a cash drought and lower valuations. And Shona reported that tech investors are working up a pitch for a $350 million rescue fund from the UK government as a recession looms and threatens to sink startups.
Wall Street pain
I'm going to jump right to the headlines here to give you a taste of what's been going on:
- Worse than the 2007 'Quant Quake': Huge quant names like Schonfeld and Bridgewater are getting slammed as market chaos blows up computer-driven trades
- Michael Platt's BlueCrest just cut at least 10 portfolio managers as the firm pulls back from the basis trade that slammed Citadel, Millennium, and ExodusPoint
- Commodity funds are shining as stocks tank, while momentum strategies are getting pummeled. Here's the latest data on who's riding out coronavirus chaos the best.
- Read the 2-page note billionaire Ray Dalio just sent investors laying out his coronavirus game plan
Cutting the cord
Amid a wave of cordcutting, live sports was one the last holdovers for TV networks. Not any longer.Lauren Johnson got her hands on an internal document from Interpublic Group's ad-buying firm Magna Global, which breaks down how much TV viewership will drop with the cancellation of March Madness and NBA games. It doesn't look good. According to her reporting, the expected viewership cuts for sports networks range from 9% to 25% while streaming TV viewership overall is expected to grow 15%, according to the agency's own figures.
And it's not just cable TV that's got lots at stake here. Patrick Coffee reported that the NBA poached a top Spotify marketer as it scrambles to keep the league connected with its fans amid a coronavirus shutdown.
And sports-betting insiders say companies are in "triage mode," cutting costs and getting creative to keep fans interested until live sports return, according to Ashley Rodriguez. Any delay to the NFL season would be a worst case scenario for these companies, she reported.
Work won't be the sameThis story from Dan DeFrancesco caught my eye this week:
It might not sound like that dramatic of an insight, but it's one I find really telling. Whether it's less travel, more video calls, fewer events, or more automation, there will be no going back to work as it was.You can read the full story here: The CRO of $27 billion data giant Refinitiv says the coronavirus could permanently alter how it employs staff and serves clients
In related news, real-estate services giant JLL told Alex Nicoll that the coronavirus could usher in a permanent "paradigm shift" towards more remote work.
ResentmentA couple of paragraphs from two different stories puts this in sharp relief:US initial jobless claims could spike to a record 2.25 million this week as coronavirus-driven layoffs hit the labor market, according to Goldman Sachs.
That's from this story on the prospect of historic unemployment. Meanwhile:
On Monday morning, 40-something Julie loaded up a rented U-Haul truck with the necessities: canned food, rice, 200 bottles of whiskey, Clorox wipes, a pack of 10 disposable face masks she purchased for $300 at an Upper East Side pharmacy, and 15 Molekule air purifiers, one for every room in her Sagaponack, New York, house.That's from this story on how the elite are preparing for the coronavirus pandemic. Something is going to give.
What did I miss? What should we be paying more attention to? Let me know.
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