How Zoom Video’s star has fallen. The videoconferencing hit of the pandemic is on the outs with investors, not horribly but enough that it may have trouble winning over shareholders of Five9. That’s the contact-center software firm Zoom proposed buying in July for a price then estimated at $14.7 billion. A 20% drop in Zoom’s stock price since the deal was struck has shrunk the value of its all-stock offer. And now, with Five9 shares trading well above the value of Zoom’s offer, Zoom either has to raise its bid or miss out.
This isn’t a situation you see too often in tech, where the buyers are usually cash-rich firms like Microsoft that don’t use stock. Zoom, funnily enough, has the cash to at least make its offer part-cash but it chose to go all-stock. Rookie mistake, perhaps, given that the company’s stock price has zoomed up and down over the past year after its breathtaking ascent during the lockdowns.
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