Zoom Priced Its IPO At A Higher-Than-Expected US$36 Per Share

Zoom IPO
A view of the exterior of the Nasdaq market site in the Manhattan borough (Photo: Reuters)

After a torrent of demand from investors for its IPO, video communications tech firm Zoon has now announced its official pricing. The company's IPO price, which has been revealed to be US$36 per share, is significantly higher than what the company had initially planned.

Zoom initially revealed earlier in the week, that it was going to pricing its stocks between US$33 and US$35 per share, which would give it a market capitalization of US$9 billion at the higher end of the range.

The firm's initial S-1 filing earlier in the month had actually set its price range to be much lower, at US$28 and US$33 per piece. The firm will be selling a total of 9,911,434 shares of Class A stock, which should bring in around US$350 million in fresh capital.

With the newly announced pricing, the company is now valued at around US$9.2 billion. This makes the company 9 times more valuable that its last private valuation in 2017 of only around US$1 billion. Stocks of the company will begin trading this week on NASDAQ, with the company placed under the ticker "ZM."

The company joins yet another tech firm, Pinterest, which will also start trading on the New York Stock Exchange this week under the ticker "PINS."

Unlike most tech startups that are planning to public this year, Zoom actually makes money. Last year, the company reported revenues of around US$330 million, with a gross profit of US$269.5 million. The company, which offers remote conferencing services using cloud computing, has all but doubled its revenues from 2017 to 2018. It has also managed to shrink its losses by more than US$14 million in 2017 and US$8.2 million in 2018.

The company is backed by a myriad of investment firms including Emergence Capital, which owns a 12.2 percent pre-IPO stake in the company. Other firms that own major stakes in the company include Sequoia Capital, Digital Mobile Venture, and Bucantini Enterprises Limited.

Zoom mainly sells video communication software for commercial and industrial firms. The company was founded by CEO Eric Yuan in 2011. Yuan was the former VP of engineering at the video-conferencing firm WebEx. Zoom will be part of a slew of so-called tech unicorns that will be making their public debut this year. One of the biggest firms to go public this year will be ride-hailing firm Uber, which is currently valued at around US$100 billion. The ride-hailing company is expected to list its shares sometime next month.

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