Zoom video communication Inc.
ZM -7.85%
Founder Eric Yuan moved about 40% of its holdings in the company he runs, a bet worth around $ 6 billion, after Zoom shares more than tripled last year.
The transaction was recorded as two gifts of nearly 9 million shares, to anonymous recipients and from two sponsors of which Mr. Yuan and his wife are co-sponsors, according to a secure filing made late Friday .
A Zoom spokesman said in a statement that “the distributions were made in accordance with the terms of Eric Yuan and his wife’s trusts, and are in accordance with the Yuans’ typical estate planning practices.” The company did not say who is now in control of the shares. Mr Yuan and his wife did not immediately respond to requests for comment.
Mr. Yuan was the company’s largest shareholder with a 15% share in the company’s value and about 40% of the company’s voting power prior to last week’s dealings, which according to InsiderScore, which analyzes stock transactions with corporate insiders. The donations were about 6% of the company’s shares payable, InsiderScore said.
The Covid-19 pandemic turned Zoom’s video meeting service into a household name and the company into an investor. The company’s success landed the 51-year-old entrepreneur on Forbes magazine’s list of billions, and he was named Businessman of the Year by Time magazine in December.
Zoom’s share price, which rallied from less than $ 100 in early 2020 to above $ 500 at the end of 2020, closed around $ 337 on Friday. The stock fell about 8% in trading on Monday afternoon. The San Jose, Calif. Company has a market valuation of about $ 100 billion.
Born in China, Mr. Yuan worked as an engineer at Cisco Systems Inc.
before leaving to start Zoom in 2011. It publicly led to a splashy IPO in 2019 and how some other tech founders took control externally with management sections .
Two trusts with the names of Mr Yuan and his wife – to whom the couple are joint sponsors – handed out about 18 million shares to anonymous recipients on March 3, according to a securities filing. The trusts held the stock as Class B shares, which receive 10 votes per apie, which could be converted into Class A shares, which have one vote.
“He changed Class B to Class A to do this so that it would have a huge impact on his voting power,” said Ben Silverman, InsiderScore’s director of research. After the deal, the Director ‘s voting power appears to have dropped to just short of 27%, InsiderScore estimated.
After reporting results last week, Zoom officials said they expected strong growth to continue this year even as lockouts and vaccines spread across the globe. The company said revenue this year would rise more than 41% after more than quadrupling to $ 2.65 billion in the fiscal year that ended in January.
“The future is here with remote growth and changing jobs from anywhere. We recognize this new reality, “said Mr Yuan in an employment call.
– Jim Oberman contributed to this article.
Write to Theo Francis at [email protected]
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