Zoom to raise $1.75bn in new stock offering

By Rahul Vaimal, Associate Editor
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American communications technology company Zoom is reportedly raising $1.75 billion through a stock offering, capitalizing on continuing demand for the video-conferencing platform during the pandemic.

According to the company statement, Zoom is selling about 5.15 million shares at $340 per share, marking a 4.7 percent discount to its last close. It is expected that the offering will close on or around 15 January 2021.

According to the statement, the company gave its underwriter a 30-day option to purchase as much as an additional 735,294 shares of its Class A stock at the public offering price, excluding underwriting discounts and fees. The stock closed up 5.7 percent on Tuesday in New York.

The sole book-runner for the deal is JPMorgan Chase, an American multinational investment bank and financial services holding company.

Zoom shares have gained more than 380 percent over the past 12 months, showing the demand the company has seen for its services as people work, learn and socialize remotely on their computers. The stock has become the pandemic economy’s barometer, rising when COVID-19 lockdowns emerge and falling on the news about vaccines.

Zoom’s CEO Eric Yuan has attempted to diversify the capabilities of the application for large enterprises, small and medium-sized businesses, and individuals so the company can expand after the coronavirus is controlled and more employees return to their offices.

In Zoom’s recent earnings report, it indicated that the sales growth in 2021 may be slightly less explosive than it was last year. But still, the company expects a rise in sales of 330 percent in the current quarter, which ends in January.