Question

Discuss the performance of Zoom (ZM) upon its IPO listing and its impact on market returns.

Answer 1

Performance of Zoom upon initial public offer listing was not that great as the company was almost trading in the similar zones till last one year and it even corrected from the initial public offering price in 2019 but this company has been a non stop performer in 2020 because there was a global events which led to an unexpected tailwind for the company that led to an exceptional performance because due to unfolding of the coronavirus there was a large number of meetings which were beginning to take place online and zoom communications was the ultimate beneficiary.

This company has returned almost ten times from its initial public offering price because this company has seen a exceptional and phenomenal demand and increase in the use from multinational customers as well so this company is beginning to acquire the digital marketplace share to a large extent and all the major meetings which were conducted online were conducted through Zoom, so there was a very high increase due to unexpected positive suddenness which ultimately unfolded out of the coronavirus as the physical businesses were shut down.

The performance of zoom has been phenomenal when we will compare it to the market rate of return because market rate of return since the listing of zoom has been around 40% but the company has provided around 900 % rate of return so this company has outperformed the Bull market to a very large extent and it is still having a lot of upside left as per the expectation of market participants.