This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Zoom Enters an Awkward Phase
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Zoom Enters an Awkward Phase
Markets

Zoom Enters an Awkward Phase

Editorial Board Published October 1, 2021
Share
Zoom Enters an Awkward Phase
SHARE

The deterioration of Zoom’s market value since the deal announcement erased any premium for Five9’s investors.

Photo: Jason Henry for The Wall Street Journal

By

Dan Gallagher

Oct. 1, 2021 12:13 pm ET

Zoom better enjoy life on its own.

The videoconferencing star walked away from its first major acquisition attempt Thursday. Shareholders for Five9 FIVN 4.71% voted down Zoom Video Communications ZM 2.30% ’ proposed all-stock deal, which had drawn opposition from shareholder advisory firms ISS and Glass Lewis over the price.

The deterioration of Zoom’s market value since the deal was first announced in mid-July erased any premium for Five9’s investors. It also sent a strong signal to Zoom’s management that boosting the offer price wouldn’t go down well with its own shareholders. Both stocks got a lift Friday morning.


Newsletter Sign-up

Heard on the Street

Agenda-setting analysis and commentary on the biggest corporate and market stories.


Still, loss of the deal raises questions about Zoom’s future path. The company maintains that it has options; a blog post by founder and chief executive Eric Yuan late Thursday said buying Five9 “was in no way foundational to the success of our platform nor was it the only way for us to offer our customers a compelling contact center solution.”

But the combination would have boosted Zoom’s annual revenue by about 15% and jump-started its efforts in the market for providing businesses with cloud-based services to run their customer contact centers, also known as CCaaS.

Hence, several analysts noted Friday that the failure of the deal puts Zoom “back to square one.” Rishi Jaluria of RBC Capital wrote that “the barriers for entry to the CCaaS market are substantial.” Ittai Kidron of Oppenheimer noted that Zoom can “double down” on internal efforts such as its Video Engagement Center service, but will lack the “established sales organization and complementary enterprise customer base” that Five9 would have brought.

Other deals could be possible. But the Five9 experience shows that will be a fraught path for Zoom—at least for now. The proposed deal drew government scrutiny over Zoom’s large operations in China, which could still be a factor in other acquisition attempts. Zoom also has a much smaller cash pile than tech giants like Microsoft and Google that are some of its main competitors, and its stock—down about 45% over the last 12 months—is too volatile to be a dependable currency.

Zoom’s own investors have much less faith in its hypergrowth potential; the stock has gone from fetching more than 50 times forward sales a year ago to its current multiple of just 18 times. That should at least leave some upside if Zoom’s going-solo plans pay off.

Write to Dan Gallagher at [email protected]

Heard Stock-Picking Leaderboard

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Google Scraps Plan to Offer Bank Accounts Google Scraps Plan to Offer Bank Accounts
Next Article U.N. Warns of Humanitarian Crisis in Ethiopia’s Tigray Region U.N. Warns of Humanitarian Crisis in Ethiopia’s Tigray Region

Editor's Pick

Jordan Peterson Hospitalized, ‘Close to Loss of life’ Amid Weird Eating regimen, ‘A long time of Mould Publicity,’ Daughter Says

Jordan Peterson Hospitalized, ‘Close to Loss of life’ Amid Weird Eating regimen, ‘A long time of Mould Publicity,’ Daughter Says

Studying Time: 3 minutes Based on the most recent replace from his daughter, writer and psychologist Jordan Peterson is coping…

By Editorial Board 5 Min Read
Maggie Baugh: Every part We Know About Keith City’s Rumored New Girlfriend
Maggie Baugh: Every part We Know About Keith City’s Rumored New Girlfriend

Studying Time: 3 minutes Is Keith City hooking up together with his…

4 Min Read
Danielle Fishel Rebuffs Whitney Leavitt After ‘DWTS’ Gaffe
Danielle Fishel Rebuffs Whitney Leavitt After ‘DWTS’ Gaffe

Studying Time: 2 minutes Did Danielle Fishel simply put Whitney Leavitt in…

4 Min Read

Oponion

9.9 million kilos of ready-to-eat meat, poultry recalled over listeria considerations

9.9 million kilos of ready-to-eat meat, poultry recalled over listeria considerations

Try what's clicking on FoxBusiness.com. A recall of just about…

October 10, 2024

Horoscopes March 11, 2025: Anthony Davis, take the trail that results in your vacation spot of alternative

CELEBRITIES BORN ON THIS DAY: Anthony…

March 11, 2025

Federal Reserve cuts rates of interest by quarter-point in December

The Fed is extensively anticipated to…

December 18, 2024

30 Morning Routine Concepts for Vitality and Productiveness

Regardless of for those who get…

March 26, 2025

Nazis are having a second—and so they’re thanking Trump

Neo-Nazi teams are praising President Donald…

August 9, 2025

You Might Also Like

Meme inventory mania 2.0
Markets

Meme inventory mania 2.0

Pacer ETFs President Sean O’Hara discusses the advantages of ETFs and lays out his favourite investments on ‘The Claman Countdown.’…

4 Min Read
Traders have fun Japan’s ‘Iron Lady’ election win
Markets

Traders have fun Japan’s ‘Iron Lady’ election win

Federated Hermes CIO Stephen Auth weighs in on Japan's first elected feminine prime minister and provides an concept on what…

3 Min Read
Tesla teases Tuesday announcement with social media movies
Markets

Tesla teases Tuesday announcement with social media movies

Niles Funding Administration founder and portfolio Dan Niles discusses Tesla’s potential $1 trillion compensation plan for Elon Musk on ‘The…

5 Min Read
Gold FOMO may push steel to ,000
Markets

Gold FOMO may push steel to $4,000

Pacer ETFs President Sean O’Hara discusses the advantages of ETFs and lays out his favourite investments on ‘The Claman Countdown.’…

3 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?