I just read the second article in a few months speculating that Zoom looks like it may be preparing to go public. I don’t offer investing advice on this blog. My personal track record with stock choices is rather pathetic. But I have to say that I agree with author Dominic Kent when he writes “It isn’t too difficult to imagine a scenario much like the Webex acquisition” (referring to Cisco’s $3.2 billion paid for WebEx in 2007).
Zoom has grown very quickly, with one article reporting 700,000 business customers last year at this time. According to author Erik Devaney, Zoom had licenses at half of the Fortune 50 companies and 90 percent of the top 200 US universities. That article also reported 300% revenue growth in 2016, marking four consecutive years of triple-digit increases.
There aren’t that many proven, independent web/video conferencing players left anymore who can boast a large and valuable customer base, stable technology, and ongoing growth. Companies looking to grow their collaboration and communication offerings through acquisition don’t have a lot of targets to pick from. Obvious potential suitors could include perennial industry behemoth West Corporation, or PGi (which has been on an acquisition kick over the last few years), or even Cisco again – just to consolidate their market foothold.
It seems to me that buying Zoom stock on IPO day (should it happen) might not be the worst gamble to try.