Zoom Video Communications issued their public stock on NASDAQ this morning with a ticker symbol of ZM. I first reported on the potential IPO back in November and wrote “buying Zoom stock on IPO day (should it happen) might not be the worst gamble to try.”
Since then, the IPO turned into one of the hottest and most eagerly-awaited offerings of the past few years. Zoom is classified among investors as a “unicorn” – a startup valued at over $1 billion. Zoom also is that rarity among tech IPOs in that the company is actually (gasp!) profitable.
The formal issuance price (available only to certain privileged entities) was $36/share, priced a little above the top of their pre-announcement range. It hit the public market above $60/share, making a lot of people instant millionaires. In the first few hours there has been a little pull-back as some people sell off quickly. Lordy knows what the price may be by the time you read this.
I had speculated on Zoom being a good candidate for acquisition by a larger entity (in the vein of Cisco and Webex), and a new article by Cromwell Schubarth in the Silicon Valley Business Journal confirms that Zoom rejected multiple buyout offers from Microsoft already. It still could happen as a public acquisition… Sometimes it is easier to get a board of directors to approve a sale as beneficial to stockholders than to get a private single owner to agree to the sale of his baby.
My favorite story from this morning is the unintended effect on another company entirely. According to Michael Sheetz on CNBC, a small company called Zoom Technologies is listed as an over-the-counter stock with a ticker symbol of ZOOM. It began trading this year at $0.01/share. This morning, it briefly hit a high of $5.50 as clueless private investors tried to buy up the wrong Zoom! Trading volume in the first hours was quadruple the volume they see on an average day. There has been a sell-off since then as people realize they now own shares in a tiny Chinese wireless communications company that “does not have significant operations.”
Good luck to anybody who bought in on the initial frenzy, and congratulations to Zoom for demonstrating the robust business nature of web conferencing!