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Summary
- Zoom is planning to raise USD 1.5 billion, to leverage the growing investors' interest.
- The video conferencing app provider intends to use the funds for managing expenses and strategic investments.
2020 was a game-changing year for many businesses. Amid the unprecedented COVID-induced challenges, when most of the traditional businesses tumbled down, there were some companies that experienced meteoric growth.
Several businesses that witnessed robust growth during the pandemic environment are taking the advantage of this growth to gain equity. The latest to join the trend is Zoom Video Communications, Inc. (NASDAQ:ZM).
Zoom to Raise USD 1.5 Billion
The video conferencing app provider unveiled its plans for a USD 1.5 billion capital raising program on 12 January 2021. The company is contemplating a secondary share sale, involving around 4.45 million of its Class A common stock, increasing its stock 10-fold from its debut.
Zoom is emerging as a powerful cloud-based business communication platform. It has garnered a lot of interest from investors, thereby driving growth. The company is making the most out of the market opportunities to expand rapidly.
Must read: Zoom (NASDAQ:ZM) On an Expansion Drive, To Open R&D Centre in Singapore
As per the reports, Zoom would use the proceeds through the secondary share sale to manage operating and capital expenses. The cloud-based company is also eyeing acquisitions or strategic investments in complementary technologies, services, products, and businesses.
On Tuesday, 12 January 2021, its shares registered a 5.66% increase to USD 356.81.
©Kalkine Group 2020
Zoom's Value Skyrocketed Amid the Digital Dependency Scenario
Zoom has grown tremendously from where it started. The pandemic year had been extremely lucky for the company.
As the circumstances changed during the coronavirus-led lockdown, people all around the world became highly dependent on video conferencing for their business meetings and even for virtual meetings with friends and family.
The world is still battling the deadly virus, and video conferencing dependency is here to stay.
Also read: Lens Through Zoom's Growth Story Amidst Growing Digitisation Trend .
When the pandemic began, Zoom was perhaps the best option for video conferencing services. Later, Facebook, Inc. (NASDAQ:FB) also launched Messenger Rooms, a video conferencing tool.
©Kalkine Group 2021
At the beginning of the lockdown, Zoom also faced several security concerns about its services; however, keeping these controversies aside the company continues the growth trajectory. Zoom reported revenue of USD 777.2 million for Q3 ended 31 October 2020, up 367% year-over-year.
Another US-based company undergoing phenomenal growth is Tesla, Inc. (NASDAQ:TSLA). After entering the S&P 500 benchmark in 2020, the company offered USD 5 billion worth of shares to make the most out of the continuously growing share prices. Its boss Elon Musk recently became the world’s richest person.
Also Read: Tesla Boss Elon Musk Dethrones Jeff Bezos To Become World’s Richest Person
