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.
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Zoom Video Communications  (ZM) - Get 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.

Several companies, in fact, have used last year's meteoric stock moves to raise equity capital, with insurance provider Lemonade Inc  (LMND)  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 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%.