Zoom Could Speed Lower When IPO Lockup Expires

CFO Kelly Steckelberg has served in her position since November 2017. She previously held senior financial positions at Zoosk, Cisco Systems, and WebEx Communications. She earned a degree in Accounting and an MPA from the University of Texas at Austin.

Management information sourced from the firm's website.

Competition: Poly, Blue Jeans, and Global Meet

Zoom Video Conferencing is a top provider in the VCaaS marketplace. However, the company faces competition from Poly, Blue Jeans, GlobalMeet, West, StarLeaf, Cisco, Microsoft (MSFT), GoToMeeting, and Google Hangouts (GOOG) (GOOGL).

Early Market Performance

The underwriters priced the IPO at $36 per share. Its expected price range was originally $28 to $32. The underwriters revised the expected price range just prior to the IPO to $33 to $35. The stock closed on the first day of trading at $62 for a first-day return of 72.2%. ZM has a return from IPO of 113.4%.

Conclusion

When the IPO lockup for ZM expires on October 15th, pre-IPO shareholders and company insiders will be able to unload large quantities of currently-restricted shares. With more than 35 million Class B shares currently subject to the lockup, significant sales could flood the secondary market and send ZM sharply lower in the short term.

Aggressive, risk-tolerant investors should consider shorting shares of Zoom ahead of the IPO lockup expiration. Interested investors should cover short positions during the October 16th and 17th trading sessions.

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Disclosure: I am/we are short ZM.

Disclaimer: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any ...

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