Video conferencing platform, Zoom is set to sell 4.4 million shares with a value of $337.71 in a secondary offering to raise $1.5 billion that will be used for acquisitions or strategic investments this year.
Experts believe that the sale of the shares is taking advantage of a surge in investors’ interest in Zoom’s stock, which quintupled in value last year when the company’s flagship product became a household name. Zoom is already profitable, but the share sale will pad its balance sheet. As of October, the company had $730.5 million of cash and equivalents, up from $283.1 million in January.
According to CNBC, the video chat company, which has been a major beneficiary of the remote work boom during the Covid-19 pandemic, is assuming a share price of $337.71, based on Monday’s close. Zoom went public less than two years ago, selling shares at $36 apiece. It expects to sell about 4.4 million new shares.
With a market cap of close to $100 billion, Zoom has the equity to make significant acquisitions.
The secondary sale will provide the capital to combine cash and potentially make deals more attractive to targets. Zoom said it plans to use the money for operating expenses and capital expenditures, and “may also use a portion of the net proceeds for acquisitions or strategic investments in complementary businesses, products, services or technologies.”