Zoom's value surges past GM and Boeing
September 1, 2020
Shares for the company Zoom saw a huge increase in early trading on Tuesday morning, leading the video conferencing firm's value to surpass that of long-running brands in the car manufacturing and aviation industries.
The company's booming second quarter caused share prices to rise 33% to $432.45 (€362 euros), raising its market value to almost $122 billion.
Zoom became a mainstay of both business and private home use during the coronavirus pandemic making it a rare winner in the crisis.
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Bigger than Starbucks
The company's meteoric rise has pushed its value past well-established carmakers General Motors and Ford, as well as aviation giant Boeing and global coffee shop chain Starbucks.
Revenues quadrupled in comparison to the same time last year, reaching 663.5 million dollars (555 million euros), way past the Wall Street forecasts.
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Zoom projected a total revenue of $2.4 billion dollars ( for its fiscal year ending in January. This is up from the 1.8 billion dollars (1.5 billion euros) it forecast back in June, and takes into account the users that will not renew the monthly subscriptions they signed up for in the first quarter.
Individuals can use the basic video conferencing service for free for individuals, but the company’s revenue growth comes from companies with 10 employees or more which sign up for annual paid subscriptions. The number of annual subscribers reached 370,200, or 304,000 more than the previous year. Companies with fewer than 10 employees subscribe monthly.
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Unpredictable success
Although originally designed for business conferences, Zoom became the go-to video conferencing service for friends and families as well as sports events and religious and educational services amid the global lockdown.
At its peak in April, Zoom saw 300 million daily video conferences using its system, compared to 10 million the previous December.
Despite the recent success, a decline in use is expected as lockdown measures ease and schools and offices reopen.
In order to maintain growth, the company announced plans to expand its Zoom phone services. The platform supports video calls, regular calls and chatting via smartphones.
ab/dj (AP, dpa)