Zoom founder Eric Yuan speaks ahead of the Nasdaq opening bell ceremony on April 18, 2019 in New York City.
Kena Betancur | Getty Images
Zoom said on Tuesday that it plans to raise $ 1.5 billion in a secondary sale of shares, valuing its shares 10 times above where it debuted in 2019.
The video chat company, which has been a big beneficiary of the remote work boom during the Covid-19 pandemic, is assuming a share price of $ 337.71, based on Monday’s close. Zoom went public less than two years ago, selling shares at $ 36 each. It expects to sell about 4.4 million new shares.
Zoom is taking advantage of increased investor interest after the shares quintupled in value last year, when the company’s main product became a household name. Zoom is already profitable, but the sale of the shares will fill your balance sheet. In October, the company had $ 730.5 million in cash and cash equivalents, compared to $ 283.1 million in January.
Zoom shares increase in 2020
With a market capitalization of around $ 100 billion, Zoom has the equity to make significant acquisitions.
The secondary sale will provide the capital to combine money and potentially make business more attractive to targets. Zoom said it plans to use the money for operating expenses and capital expenditures, and “may also use a portion of net revenue for strategic acquisitions or investments in complementary businesses, products, services or technologies.”
Although Zoom’s valuation has multiplied tenfold since its IPO, the company is significantly below its maximum. Since the peak of $ 568.34 in mid-October, Zoom’s stock has fallen by more than 41%, having its biggest impact on reports that Covid-19 vaccines were highly effective and would be launched on the market in a hurry.
Zoom’s revenue growth has reached 350% in each of the past two quarters, and the company said in its last earnings report in November that fiscal fourth-quarter growth will approach 330%. In the middle of the year, growth is expected to moderate dramatically, as the company has to deal with much more difficult comparisons and the likelihood of people coming back to the office.
Zoom’s shares rose 1.6% to $ 343.14 in mid-Tuesday afternoon.
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