No school like the old-skool

The last few years have been wild for markets, from the Covid-triggered collapse in March 2020, the swift stimulus-soaked recovery and the renaissance of day-trading, to the present resurgence of left-for-dead value stocks.

One of the best ways to sum up just how incredibly powerful the ebb and flow of market trends has been lately is to look at an equity valuation chart comparing ExxonMobil with Zoom Video Communications over the period.

Zoom entered 2020 with a market capitalisation of under $20bn, but ended it a genericised verb valued at about $100bn. At its absolute peak in the autumn of 2020 it was worth over $160, surpassing even ExxonMobil, an old-economy titan that traces its roots back to John Rockefeller’s Standard Oil.

It couldn’t have been more zeitgeisty.

Fast-forward to the early summer of 2022 and things look radically different.

Zoom’s stock market value has collapsed back to $27bn, as investors have ditched most of the pandemic-era winners in favour of stocks that benefit from economies returning to normal. But the biggest recent winners have been old-skool companies in out-of-fashion industries — and above all those that pump hydrocarbons out of the ground.

ExxonMobil’s stock market recovery first began when Pfizer et al announced that they had developed a strong slate of anti-Covid vaccines in November 2020. But it is the supply-chain disruptions and Russia’s invasion of Ukraine that has really sent oil prices and Exxon’s shares soaring.

The OG Big Oil company started 2022 with a market cap of $270bn, but at pixel time it is approaching $400bn. That’s the most since the big energy price collapse that started in 2014.

In its first-quarter earnings report Exxon even announced an enlarged buyback programme, aiming to repurchase $30bn of its shares by the end of 2023 — enough to buy Zoom outright (control premium not included, natch).