Zoom founder Eric Yuan speaks before the opening ceremony of the Nasdaq bell on April 18, 2019 in New York.
Got Betancur | Getty Images
Zoom said on Tuesday that it intends to raise $ 1.5 billion in a secondary sale of shares, valuing its shares 10 times more than it started in 2019.
The video chat company, which was a major beneficiary of the increase in remote work during the Covid-19 pandemic, is assuming a share price of $ 337.71, based on Monday’s closing. Zoom went public less than two years ago, selling shares for $ 36 a piece. It expects to sell about 4.4 million new shares.
Zoom is taking advantage of a growing investor interest after the stock quintupled in value last year, when the company’s flagship product became a household name. The zoom is already profitable, but the sale of shares will block its balance sheet. In October, the company had $ 730.5 million in cash and cash equivalents, up from $ 283.1 million in January.
Zoom’s stock market rally in 2020
With a market cap of nearly $ 100 billion, Zoom has the equity to make significant acquisitions.
Secondary selling will provide capital to combine cash and possibly make transactions more attractive to targets. Zoom said he intends to use the money for operating and capital expenditures and “can also use some of the net income for strategic acquisitions or investments in complementary businesses, products, services or technologies.”
While the Zoom rating has multiplied 10 times since the IPO, the company has dropped significantly. Since reaching $ 568.34 in mid-October, Zoom shares have fallen more than 41%, with the highest success rate in reports that Covid-19 vaccines were extremely effective and would be on the market.
Zoom’s revenue growth exceeded 350% in each of the last two quarters, and the company said in its latest earnings report in November that fiscal growth in the fourth quarter will approach 330%. By mid-year, growth is expected to moderate dramatically, as the company faces much harsher comparisons and the likelihood of people returning to the office.
Zoom shares rose 1.6% to $ 343.14 in the middle of Tuesday afternoon.
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