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As per Zoom, the offering is “subject to market and other conditions, and there can be no assurances as to whether or when the proposed offering may be completed.”
Online conferencing services company Zoom Video Communications Inc (NASDAQ: ZM) announced its plans to sell around $1.5 billion in a new stock offering. According to Zoom, the offering would be the largest share sale since its public debut back in 2019. It may value its stock 10 times higher than the previous public sale.
Being the COVID-19 stay-at-home orders’ winner, Zoom is planning to sell 4.4 million new shares at a price of $337.71, based on Monday’s close. Notably, the price back in 2019 was only $36 per share. Back then, Zoom raised $447.9 million in net proceeds. In a new share sale, Zoom is targeting to raise as much as $1.5 billion.
The company is planning to offer $1.5 billion of shares of its Class A common stock. The sole book-running manager for the offering is the US largest bank JPMorgan Chase (NYSE: JPM). Besides, Zoom plans to grant the underwriter a 30-day option to buy up to an additional $225 million of shares of its Class A common stock at the public offering price, less underwriting discounts, and commissions.
Currently, it is not clear when the share sale will take place. As per Zoom, the offering is “subject to market and other conditions, and there can be no assurances as to whether or when the proposed offering may be completed, or as to the actual size or terms of the proposed offering.”
Zoom Performance Ahead of Secondary Share Sale
Zoom has been one of those who benefited from the coronavirus pandemic and saw a significant increase in the number of its paying subscribers during the first virus wave. The demand for the cloud-based video conferencing service surged, which added to Zoom’s popularity. By the end of October 2020, the company’s revenue ballooned by 310% to $1.8 billion in the nine months since January. In addition, as of October, the company had $730.5 million of cash and equivalents. Yer-over-year, the revenue increase totaled 366.52%. In Zoom’s latest earnings report, the company suggested that revenue growth in 2021 maybe not as explosive as it was last year. However, expectations are still big. In the current quarter that ends in January, Zoom expects an increase in sales of 330%.
As far as Zoom stock is considered, Zoom has gained more than 380% in the past 12 months. Its share price surged in 2020, which boosted its market capitalization to $96.59 billion. On Tuesday, Zoom shares rose by 5.66%. The stock closed at $356.81 per share. After hours, it rose by another 0.33% to $358.00.