Zoom founder Eric Yuan will speak ahead of the Nasdaq opening bell ceremony on April 18, 2019 in New York City.
Kena Betancur | Getty Images
Zoom said Tuesday it plans to raise $ 1.5 billion in secondary stock sales, valuing its stock 10 times above where it posted in 2019.
The video chat company, which has been a major beneficiary of the remote work boost due to the Covid-19 pandemic, is assuming an allotment price of $ 337.71, based on Monday’s close. Zoom went public less than two years ago, selling shares at $ 36 per piece. About 4.4 million new shares are expected to be sold.
Zoom is taking advantage of a surge in investor interest after the stock fell in value last year, when the company’s flagship product became a household name. Zoom is already profitable, but will sell the shares. As of October, the company had $ 730.5 million in cash and the like, up from $ 283.1 million in January.
Zoom stock rally in 2020
With a market potential of nearly $ 100 billion, Zoom has the opportunity to make significant investments.
The sale of the high school will bring the capital to pool money and could make contracts more attractive to targets. Zoom stated that it intends to use the money for operating costs and capital expenditure, and “may also use a portion of the net cash for strategic investment or investments in businesses, products, services or complementary technologies. . “
While Zoom’s valuation is like a 10-fold multiplier from its IPO, the company is pretty much off the top line. Since peaking at $ 568.34 in mid-October, Zoom shares have fallen more than 41%, hitting them hardest on reports that Covid-19 vaccines were highly effective and would be torn to market.
Zoom revenue growth has risen to 350% in each of the past two quarters, and the company said in its latest earnings report in November that fiscal growth in the fourth quarter will be come to 330%. By the middle of the year, the growth is expected to be moderate as the company has to deal with much more difficult comparisons and the likelihood of people returning to the office.
Zoom shares rose 1.6% to $ 343.14 from mid-Tuesday afternoon.
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