Did you think the news on the super popular online video conferencing platform Zoom would stay in 2020? But no! The American tech company has something to please investors. It’s time to find out the details.
What is it about?
On January 12, Zoom Video Communications published a press release on its official website that it plans to conduct an additional placement of securities by January 15. The company intends to sell 5.15 million class A shares at $ 340 per share. According to experts, the amount of funds raised “clean” will reach $ 1.5 billion.
The IT firm will provide JPMorgan Chase, the only bookrunner for the offering, with a 30-day option to acquire an additional 735,000 shares for $ 225 million.
To remind, on January 12, Zoom securities were traded on NASDAQ at $ 356.81 per unit, which is 4.7% more than the price of the announced placement. Note the positive reaction of the market to the news: at the time of preparation of the material, the price of the securities was $ 383.24, that is, after the publication of the press release, quotations grew by 7.4%.
Interesting facts about Zoom
- On April 17, 2019, the company held an IPO. Bidding started at $ 36 per unit.
- The initial public offering of securities attracted $ 447.9 million.
- The price per share for the planned additional placement will be almost ten times higher than the price of the paper for the IPO – $ 340 versus $ 36.
- Over the past 12 months, Zoom Video Communications has gained 382%.
- Revenue for the third quarter of 2020 was $ 777.2 million, showing an increase of 367%.
- Net profit for the same period reached $ 198 million, which is 94 times more than this indicator for the third quarter of 2019.
- According to reports for Q3 2020, the customer base with annual income exceeding $ 100K increased by 136%.
- According to forecasts for the current quarter, revenue for November-January will reach $ 806-811 million.
Summing up the result
Zoom Video Communications plans to sell just over 5 million shares and raise $ 1.5 billion. This offer has been the largest since the IT-company entered the NASDAQ exchange. JPMorgan Chase will be the only bookrunner.
In the context of the COVID-19 pandemic and the growth of distance work and learning, the online video conferencing platform has gained incredible popularity around the world. In 2020, the share price increased by almost 400%, from $ 68 per share to $ 337.3.
According to various sources, the services of the company are used by 75 to 100 million users, but only 20% of them are paying customers. Therefore, the main task of a representative of the online communication sector is still to increase the volume of monetization. Whether “Zoom” will be able to expand the audience of paying customers and maintain the growth rate of financial indicators, 2021 will show.