Zoom founder Eric Yuan speaks ahead of the Nasdaq opening ceremony on April 18, 2019 in New York City.
I have Betancur | Getty Images
Zoom said Tuesday it plans to raise $ 1.5 billion in a share sale, valuing its shares 10 times higher than it debuted in 2019.
The video chat company, which has been a major beneficiary of the remote work boom during the Covid-19 pandemic, is assuming a stock price of $ 337.71, based on Monday’s close. Zoom went public less than two years ago, selling shares at $ 36 a piece. It expects to sell about 4.4 million new shares.
Zoom is taking advantage of a rise in investor interest after the shares quintupled in value last year, when the company’s star product became a household name. Zoom is already profitable, but the sale of shares will amortize its balance sheet. In October, the company had $ 730.5 million in cash and cash equivalents, up from $ 283.1 million in January.
Rally of the actions of Zoom in 2020
With a market capitalization close to $ 100 billion, Zoom has the net worth to make major acquisitions.
Secondary selling will provide the capital to combine cash and potentially make bids more attractive to targets. Zoom said he plans to use the money for operating expenses and capital investments and “may also use a portion of net income for strategic acquisitions or investments in complementary companies, products, services or technologies.”
Although Zoom’s valuation has multiplied tenfold since its IPO, the company is significantly out of its high level. Since reaching $ 568.34 in mid-October, Zoom shares have fallen more than 41%, achieving its greatest success in reporting that Covid-19 vaccines were highly effective and would be launched on the market. .
Zoom’s revenue growth has surpassed 350% in each of the last two quarters and the company said in its latest earnings report in November that fourth-quarter fiscal growth will approach 330%. By mid-year, growth is expected to moderate drastically, as the company faces much harsher comparisons and the likelihood of people returning to its office.
Shares of Zoom rose 1.6% to $ 343.14 mid-afternoon on Tuesday.
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