Insider Sale Alert: Zoom Just Dumped $1.5 Billion Shares

On Tuesday, Zoom filed with the SEC to sell $1.5 billion of common stock.

The video-conferencing software company’s shares have been on a rollercoaster ride since the beginning of 2020, as it’s been a prime beneficiary of the work-from-home trend. Zoom’s [$ZM] stock soared more than 760% from where it closed out 2019, at $68.04, to its intraday top of $588.84 on October 19. But since then it’s tumbled about $250, or more than 40%, in less than three months.

The dip in Zoom’s share price illustrates growing skepticism about stepped-up competition from deep-pocketed competitors like Cisco Systems [$CSCO], RingCentral [$RNG] and Microsoft [$MSFT], as well as worries about how much the company’s growth will slow as the economy reopens. Zoom is Developing More Products for Post-Pandy

Zoom has continued to see remarkably high usage. The platform now supports over 3 trillion annualized meeting minutes, and regularly sees well over 300 million daily meeting participants. This includes participants from over 125,000 schools that are using Zoom for free during the pandy.

Amid the pandy, Zoom has continued to report colossal growth—for Q3, it posted revenue of $777.2 million, up 367% from 2019. For the fiscal Q4, Zoom is forecasting revenue of $806 million to $811 million, with non-GAAP profits of 77 to 79 cents per share. The Street’s consensus calls for $814.4 million in revenue and profits of 80 cents per share.

Ahead of the offering revealed today, Zoom had about $1.87 billion in cash and marketable securities, and no long-term debt. Zoom said proceeds from the offering will be used “for working capital and general corporate purposes, including sales and marketing activities, research and development activities, general and administrative matters, repayment of debt, other business opportunities and capital expenditures.”

In other news, Zoom said Tuesday that it has reached 1 million users for Zoom Phone, the company’s cloud-based telephony service. Zoom shares were nearly flat in midmorning Tuesday trading, down 6 cents to $337.65, while the S&P 500 was up 0.2%.


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