Technology

Zoom seeks to raise $1.5 billion through new stock offering

Updated : January 13, 2021 05:26 PM IST

Zoom Video Communications Inc. is planning to raise $1.5 billion through its stocks in an underwritten public offering.

However, the company has not provided any further details regarding the offering, saying that it was subject to market and other conditions.

Zoom Video Communications Inc. is planning to raise $1.5 billion through its stocks in an underwritten public offering. However, the company has not provided any further details regarding the offering, saying that it was subject to market and other conditions.

The company, headquartered in San Jose, California, has appointed JPMorgan as the sole underwriter and is also planning to grant them a 30-day option to buy up to an additional $225 million of its shares at the public offering price, before underwriting discounts and commissions.

Zoom can use the raised amount for operating expenses, capital expenditures, acquisitions, or strategic investments in complementary businesses, products, services, or technologies.

It is said to be the largest stock offering since the company’s trading debut in 2019. Zoom has a market cap of $100 billion whereas the shares of the company rose 5.7 percent to close at $356.81 on Tuesday.

Founded in 2011, Zoom gained more popularity during the lockdown last year when the number of users surged on the virtual-meeting platform. A Bloomberg report stated that the company gained over 380 percent in the past 12 months, reflecting the demand it has seen during the pandemic-induced lockdown.

As per a report by The Wall Street Journal, Zoom had raised $447.9 million in net proceeds through its initial public offering (IPO), according to one of its quarterly filings in 2019.

As per the experts, it is being expected that Zoom’s revenue growth in 2021 can be slightly less explosive than it was last year. The company still expects an increase in sales of 330 percent in the current quarter, which will end in the month of January. In each of the past two-quarters Zoom's revenue growth has topped 350 percent.

With the popularity and growth projections, Zoom’s rivalry has increased with competitors such as Facebook and Microsoft because of which the company's growth may get moderated by the mid-year.

Zoom seeks to raise $1.5 billion through new stock offering

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