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Zoom Video Communications Inc. founder Eric Yuan transferred about 40% of his ownership in the company he runs, a stake valued at around $ 6 billion, after Zoom’s shares more than tripled last year.
The transaction was recorded as two donations of almost 9 million shares each, to unspecified recipients and from two funds of which Yuan and his wife are co-trustees, according to a share document made on Friday night.
In a statement, a spokeswoman for Zoom said that “the distributions were made according to the terms of Eric Yuan and his wife’s trust funds, and are consistent with the Yuans’ typical estate planning practices.” The company did not say who now controls the shares. Mr. Yuan and his wife did not immediately respond to requests for comment.
ZOOM CONTINUES TO GROW!
Mr. Yuan was the company’s largest shareholder with a 15% stake in the company’s value and about 40% of the company’s voting power before last week’s transactions, according to InsiderScore, which analyzes stock transactions by corporate insiders. Those present accounted for about 6% of the company’s outstanding shares, InsiderScore said.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| ZM | ZOOM VIDEO COMMUNICATIONS, INC. | 310.93 | -26.50 | -7.85% |
ZOOM REMAINS CORONAVIRUS PANDEMIC FIXTURE
The Covid-19 pandemic has made Zoom’s videoconferencing service a household name and the company a darling of investors. The company’s success put the 51-year-old businessman on Forbes magazine’s list of billionaires, and he was named the entrepreneur of the year by Time magazine in December.
Zoom’s stock price, which rose from less than $ 100 in early 2020 to over $ 500 in late 2020, closed at around $ 337 on Friday. The shares fell about 8% in Monday afternoon trading. The San Jose, Calif., Company has a market valuation of around $ 100 billion.
Born in China, Mr. Yuan worked as an engineer at Cisco Systems Inc. before leaving to start Zoom in 2011. He made it public in a flashy IPO in 2019 and, like some other technology founders, maintained excessive control with supervisory actions.
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Two trusts named after Mr. Yuan and his wife – and the couple is a co-curator – gave about 18 million shares to unspecified recipients on March 3, according to the filing of the bonds. The trusts held the shares as Class B shares, which receive 10 votes each, which could be converted into Class A shares, which have a single vote.
“He converted Class B into Class A to do this, in a way that greatly affected his voting power,” said Ben Silverman, director of research at InsiderScore. After the transactions, the CEO’s voting power appears to have dropped to just under 27%, estimated InsiderScore.
After reporting the results last week, Zoom executives said they expected strong growth to continue this year, even as the blockages eased and vaccines launched around the world. The company said revenue this year would increase by more than 41% after more than quadrupling to $ 2.65 billion in the fiscal year ending in January.
“The future is here with the emergence of remote changes and from anywhere. We recognize this new reality, “said Mr. Yuan in a results conference call.