The Remote Connectivity Investment Thesis

As investors with a long-term horizon, we find it frustrating when a temporary investment thesis impacts a stock we’re holding or thinking about holding. For example, we recently looked at how Telehealth is More Than Just Virtual Doctor Visits. The best pure-play stock for the telehealth thesis, Teladoc, is up +112% year-to-date compared to a +30% gain in the Nasdaq over the same time frame. Some of that rise could be attributed to Teladoc’s acquisition of Livongo, but it’s most likely due to “the Rona.” Look no further than how Teladoc shares reacted to the news of a possible coronavirus vaccine – they fell nearly -14%.

Perhaps the most extreme example of a stock affected by the coronavirus thesis is Zoom, the video-first communications platform provider whose shares are up more than +500% since the beginning of the year. That’s after shares fell -17% in reaction to news of a possible vaccine.

In looking at the basic financials for Zoom, we can see that revenues have soared. In the third quarter of 2020, Zoom’s revenues were more than they brought in throughout all of 2019.