During yesterday's session, we learned the news that the popular videoconferencing application Zoom (ZM) has reached an agreement for the acquisition of Five9 for a total of $14.7 billion in an operation that could be completed during the first half of 2022.
Five9 is an American provider of cloud services through its Virtual Contact Center (VCC) platform that allows users to simultaneously and in an optimised way manage customer interactions through voice, chat, e-mail, social networks and channels through mobile devices. Therefore, with this acquisition, Zoom seeks to increase its presence among the companies' customers, thus allowing it to increase its long-term growth.
Like Zoom, in recent years Five9 has experienced a strong revaluation in the stock market that led it to mark all-time highs on March 1 of around $198 per share.
In previous analysis on Zoom, we could see how this company has obtained excellent results both in 2020 and in its first fiscal quarter corresponding to 2021, so this acquisition could further strengthen its growth.
Over the past year, Zoom has been one of the biggest players in the market, thanks to the rise of telecommuting and virtual meetings between friends due to the pandemic. Despite this, since it marked all-time highs on October 19, 2020 at $588.84 per share, the price action is experiencing a clear downward trend that led the price to mark annual lows around $277 per share, although finally during the first half of the year this company experienced a rise of 14.74%.
If we look at the daily chart, we can see that the price is currently struggling with its important support level in its 200-session moving average (red) after breaking down the upside channel that had been following from the annual lows after the accumulated overbought.
The loss of this important level of support could open the door to a further correction that could take the price up to $300 per share or even to annual lows.
On the contrary, if it manages to maintain this level of support it could form a new upward momentum, although as we can see in the daily chart, the price would have to face several levels of resistance to consolidate this possible new upward momentum.
(Click on image to enlarge)
Source: Daily Zoom chart of Admiral Markets' MetaTrader 5 platform from March 3, 2020 to July 20, 2021. Held on July 20 at 10:00 am CEST. Note: Past performance is not a reliable indicator of future results or future performance.
Evolution of the last 2 years:
- 2020: 395.77%
- 2019: -6.11%
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