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Making money by IPO. Zoom prepares for primary placement

Zoom Video Communications (headquartered in San Jose, California) provides remote conferencing services using a cloud computing company. Zoom offers communications software that integrates video conferencing, online meetings, chat and the use of various mobile and stationary devices.

Zoom products are used by completely different customers from individual users to Fortune 500 companies. Among corporate clients, there are such companies as Uber, Slack, Dell, Oracle and Gap.

Financial indicators

Before IPO 2-3 weeks before the start of the IPO, the company publishes information on the opening of trading: financial statements for 3 years, a description of the company’s business, plans for the future, as well as the risks that management sees in its own business. Below are the main indicators from the company’s reporting:

  • The company has 50,800 customers in 180 countries.
  • The company’s revenue at the end of 2018 was $ 331 million, which is 118% more compared to 2017 (151 million) and 542% compared to 2016 (61 million).
  • Gross margin from the beginning of 2016 to the end of 2018 increased from 77% to 82%.
  • Significantly increased cash flow of the company: 2016 9.3 million dollars; 2017 19.4 million dollars; 2018 51.3 million dollars.
  • The customer base retention rate is 140% (shows how much of the revenue from existing customers the company managed to maintain in the current reporting period, taking into account the transfer of customers to more expensive and cheaper tariff plans and customer churn.)

As we can see, Zoom shows impressive financial and operational performance over the past three years.

IPO options


How to invest?

The purchase of the company’s shares will be available immediately after the IPO date (April 18). Prior to this date, large investors may apply for a preliminary purchase of shares.

For small and medium investors, it is also possible to buy shares at a better, preliminary price ($ 28$ 32 per share), since after an IPO, analysts predict a sharp jump in the rate of up to $ 50 per share. To do this, the investor must join the pool, which collects investments in one package to participate in the initial offering.

In the course of the analysis, one of the firms providing the opportunity to invest in the company’s IPO Zoom is the financial company United Traders.

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