With the outbreak of the coronavirus pandemic, many industries have been affected. Many of them have had to shut down as they lack clients to work with. These industries might have closed down due to a lack of finances to keep the business going. The aim of any business, either small or big, is to make a profit and grow the business. This is not the case as the pandemic caught everyone unaware. No one knew that the pandemic could last for a longer period. Here are five ways in which the entertainment stock has been affected by the pandemic.
• Closure of businesses
One of the impacts of the pandemic is the closure of businesses as the virus continues to spread. Those traditional entertainment companies, like studios, were closed as no one recorded in them. The effect leads to the decrease of profits from those companies. As the profit reduced, the entertainment stocks value went low. Anyone who had bought the stocks intending to sell them later faced major losses as the investors anticipated selling their stocks; the prices had gone completely down.
The entertainment industry is trying as much as possible to rise from the ashes of the pandemic. You can go to insidertrades and see the prices associated with entertainment stock. You can then decide whether or not it is time to sell your shares.
• Lack of public performance
As seen above, the pandemic brought about businesses closing down as one way of trying to contain the virus. The closure affected the entertainment industry as the places where performances were held in clubs and parties were prohibited. The closure affected how the entertainment industries used to assign gigs for their performers. This made the industry have reduced profits making the companies’ shares go down. Before the pandemic, the companies that deal in entertainment had been earning much as there was no movement restriction.
Many companies in the entertainment industry were affected negatively by the sudden pandemic and all the containment measures that came with it. There are some companies still under the entertainment sector that benefited from the pandemic. A company like Netflix had a massive increase in profit as most people were indoors throughout, thus a lot of screen time. Before employers adopted the work from home scenario, employees were idle and spent 90% of their time watching movies online.
The increase in demand for new movies caused Netflix to have its stock increase. If you had bought the Netflix shares before the pandemic to sell them later, their prices increased dramatically. As you can see above, the entertainment industry was affected negatively by the coronavirus pandemic, but some companies were affected positively.
• No new content produced
Some of the containment measures in curbing the spread of the virus are restriction of movement and social distancing. These measures affected the industry negatively. Most of these industries, especially the movie sector, depended on cinemas for their movies to be aired. The containment measure where people observed social and physical distancing made the market value for movies go down. Cinemas were closed, and those that remained opened did not have enough space to accommodate the large numbers.
As a result of no cinemas being open to showcase new movies, no new content was created as the public could not watch them. Another reason why no new content was created is the restriction of movement. A good example is that Disney canceled their London press launch.
• Reduction of buyers
Many of the entertainment stocks lack more buyers as the people are not sure of the future of the virus. As seen above, the virus has impacted the industry in the wrong way. The public is afraid of buying the entertainment stocks then suffering huge losses afterward, as they don’t know when the virus will be over. When the entertainment industry has been affected, their stocks are also affected as no one wants to suffer losses in their attempt to invest.
As seen above, there are many ways in which the pandemic has affected industries, not only the entertainment industry. So if you are thinking of investing in entertainment stocks, be careful not to experience loss in search of profit.