F1 stocks plunge amid Coronavirus outbreak
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The F1 season hasn’t even begun and the company is already facing problems. It appears the Coronavirus is exploring other avenues to infect apart from human health. The big loser in all of this was the Formula One Group.
F1 stocks plunge
Yesterday, F1’s stock price took a steep nose dive – severely devaluing the company. The company’s stock fell by four per cent, resulting in F1 losing $300 million in valuation. This means F1’s current stock value is similar to its listing way back in mid-2017.
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In the past few hours the #F1 share price has CRASHED nearly FOUR percent wiping more than $300m off its value. $FWONK fell by nearly $2 BILLION in Feb and is now at June 2017 prices! Investors are seeing sports cancelling small events whilst #F1 still wants to race in Vietnam!! pic.twitter.com/1XSitYOTxZ
— Formula Money (@FormulaMoney) March 2, 2020
This is a setback for the company, which recently drew a profit for the first time in 3 years. The company’s income rose to $2022m last year, which is a small step up from $1827m in 2018. Formula One’s major revenue sources are from broadcast rights and sponsorship fees. The company attributed its profit to these two revenue sources.
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Speaking to Motorsport.com, Liberty Media said: “Broadcast revenue increased in the fourth quarter and full-year due to contractual rate increases, partially offset by the impact of weaker foreign exchange rates.”
“Advertising and sponsorship revenue was relatively flat in the fourth quarter, and advertising and sponsorship revenue grew in the full year due to revenue from new sponsorship agreements”.
Many races under threat
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F1 has cancelled the Chinese Grand Prix due to the outbreak of the disease. However, the epidemic could also affect other races on the calendar. The opening three rounds of the F1 calendar are under threat from Coronavirus.
Additionally, the European leg of the F1 calendar could also be affected due to the Coronavirus outbreak. There has been a major spike in cases reported from Italy, which also affects some teams. As the Italian Grand Prix is held in September, this gives F1 some breathing space on the future course of action.
As things stand, the Australian and Vietnamese Grand Prix are looking good to go. The Bahrain race is in a precarious situation, with the kingdom imposing restrictions on public gatherings.
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F1 CEO Chase Carey, said: “We’re headed to Melbourne, heading to Bahrain and heading to Hanoi.”
F1 action will (may) return next week with the Australian Grand Prix.
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