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Zoom Video Shares Slip Lower On $1.5 Billion Stock Sale Plans

Zoom is the latest in a series of companies using last year's meteoric stock gains to raise equity capital heading into 2021.

Zoom Video Communications  (ZM) - Get Zoom Video Communications Inc. Report shares slipped lower Tuesday after the online conferencing group said it plans to sell around $1.5 billion in new stock.

Zoom said it would sell around 4.45 million of its Class A common stock through an offering lead by JPMorgan Chase & Co, noting in a Securities & Exchange Commission filing that $1.5 billion proceeds generated from the sale would be used for 'general corporate purposes'. The so-called mixed-shelf filing also includes the prospect of issuing new debt securities. 

Zoom shares were marked 0.6% lower in early trading on the Nasdaq to change hands at $336.00 each, a move that trims the stock's six-month gain to around 27%.

The move still leaves Zoom shares some 350% higher than at the start of the year, with gains driven by a surge in the use of its conferencing and meeting tools during both the peak and subsequent waves of the global coronavirus pandemic.

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Several companies, in fact, have used last year's meteoric stock moves to raise equity capital, with insurance provider Lemonade Inc  (LMND) - Get Lemonade Inc. Report saying earlier Tuesday it would sell 3 million shares of its stock through an underwritten offering, including 1.5 million from existing holders and 1.5 million from the company itself. 

Lemonade shares were marked 5.4% lower in pre-market trading at $173.40, but that would still leave the stock with a 52-week gain of around 150%.

Last month, Tesla Inc  (TSLA) - Get Tesla Inc. Report unveiled the 'at-the-market' offering for the sale of around $5 billion worth of shares following its inclusion into the S&P 500 benchmark and a 2020 gain of around 750%.