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Highlights
- Zoom Video Communications, Inc. (NASDAQ:ZM) and Five9, Inc. (NASDAQ:FIVN)have mutually agreed to terminate their merger deal.
- The all-stock transaction was valued at approximately US$14.7 billion.
- Zoom stock fell around 26% since the announcement of the Five9 Inc. acquisition in July, while Five 9 stock declined around 15% in the same period.
Zoom Video Communications, Inc. (NASDAQ:ZM) stock was up 3.28%, while Five9, Inc. (NASDAQ:FIVN) stock gained 1.02% in premarket trading on Friday after their merger deal fell apart. They announced the termination of the deal on Thursday.
ZM was priced at US$270.09, and FIVN traded at US$161.37 at 8:12 am ET on Oct 1.
Here we discuss some of the recent developments of the two companies.
Zoom Video Corporations, Inc.
The Zoom Video stock rose on Friday, and a day after its merger deal with Five9 Inc fell apart.
Five9 said on Thursday that the two companies mutually agreed to end the agreement after most Five9 shareholders voted against it.
The stocks have been gaining investors’ attention following their merger talks.
On July 18, Zoom announced to acquire Five 9., an intelligent cloud contact center provider, under a definitive agreement. The all-stock transaction was valued at around US$14.7 billion.
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The deal was expected to help Zoom Video boost its market presence by targeting enterprise customers. The company has plans to scale up its operations in the cloud contact center market.
However, the deal did not get the requisite number of votes from Five9 shareholders for approval. As a result, the agreement had to be cancelled, Five9 Inc. said.
Zoom’s 52-week highest and lowest stock prices were US$588.84 and US$255.25, respectively.
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Source – pixabay
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For the three months ended July 31, 2021, Zoom generated revenue of US$1.02 billion compared to US$663.5 million for the same quarter of the previous year.
The net income was US$317 million or US$1.04 per share diluted compared to US$185.99 million or US$0.63 per share diluted for the July quarter of 2020.
The company has a market capitalization of US$77.7 billion. Its P/E ratio is 79, and the forward P/E ratio for one year is 78.77. The company went public in 2019.
On Sep 30, the stock closed at US$261.5, with a share volume of 4,733,067. The stock fell around 22.4% YTD.
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Five9, Inc.
The Five9 stock was up 1.5% at 8:50 am ET in the premarket session on Friday.
Five9 Inc. provides intelligent cloud software for contact centers for communication, including automatic call distribution and interactive voice response.
The San Ramon, California-based company’s routing solutions can direct call-center customer inquiry to the person best able to handle the query and at the same time suggest a quick, satisfying, and best possible solution to the client.
The company has a market capitalization of US$10.8 billion. Its IPO came in 2014.
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Its 52-week highest and lowest stock prices were US$211.68 and US$128.01, respectively.
Five9 incurred a net loss of US$(16.53) million for the quarter ended June 30, 2021, on revenue of US$143.78 million. The net loss was US$(16.05) million on revenue of US$99.79 million for the July quarter of 2020.
Its Q3 results will be declared on November 8, 2021. The stock closed at US$159.74 on Sep 30, 2021, with a share volume of 2,220,845. The stock fell 8.41% YTD.
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Bottomline
Despite the failure of their merger attempt, both Zoom and Five9 will continue their partnership in supporting each other’s communications systems to strengthen their contact center services. In recent months, the communication sector has witnessed a boom driven by covid-fuelled demand as more people started working remotely.
Although the virus threat has significantly reduced, many companies have allowed employees to work from remote locations indefinitely. Experts forecast rapid growth in the sector due to the favorable business environment and fast technology developments. However, investors should evaluate the companies carefully before investing.
