As many students are taking classes online due to the COVID-19 pandemic, they have become largely familiar with the tech giant, Zoom. However, before the world transformed as we know it, Zoom was struggling to gain traction due to its limitations. There is a popular stigma that crisis’s drive change, for the better or the worse. For example, the colonization of America caused railroads to be built, the space race caused the spread of many inventions such as Velcro to take place, and others. In this case of the pandemic, this crisis drove the implementation of technology into our daily lives as seen in the picture below.
(Image 1)
Zoom became open to the public to buy and sell shares on April 18th, 2019, listing each share to be sold at $36 initially. Zoom initially saw some popularity as businesses started to take on its platform to reduce unnecessary business trips. By June 2019, its stock was priced at $100 a share. After the initial hype, analysists questioned the widespread implementation capabilities of Zoom while its number of users became relatively flat as seen in image 2. This caused the stock value to tank back down to about $60 a share in December of 2019. Once rumblings of COVID-19 started to spread, the stock value creeped back up to $100 a share in early March of 2020 in anticipation of online school. Still however, there were worries of competing online platforms such as Microsoft Team that kept the stock from going through the roof.
(Image 2)
Since the beginning of the pandemic, the movement of Zoom’s stock has been incredible. Today, the total market cap of Zoom is over $100 billion, over 10x what it was when it was initially sold to the public. Worries about competition eased as the Summer of 2020 went on as Zoom was planned to be used by thousands of colleges, schools, and businesses across the world. This round of hype caused the stock to balloon up to $270 in July of 2020. The stock cooled off for a month or so before the beginning of school. Then, the start of school added more wood to the fire and caused Zoom to rocket up to an all-time high of $560 in October of 2020. Going forward after that, talk of vaccine production and a push to get back to in-person activities have hurt the stock since then, currently sitting at $324 today. However, one thing is clear in the future, Zoom will not disappear from our lives in the near future and neither will the stock. The pandemic has caused a strong user-base for Zoom that will continue for years and help the stock grow in the future.
At the beginning of the pandemic after my first zoom call I remember thinking: I should buy some zoom stock, I’m sure it’s going to be worth a ton of money soon. Of course, with my lack of stock market prowess, I never actually bought any stock and my life remained unchanged. But anyways, it’s not surprising how much zoom’s stock has jumped during the pandemic, and I think it has solidified Zoom’s status as an influential tech company, but I think zoom is going to have to adapt if they want to stay successful because nobody wants to be online anymore. And after everyone gets the vaccine, nobody has to be online anymore.
Even now I think Zoom stock is still over valued. It skyrocketed in the fall because no one knew how long COVID-19 would last. Now with the vaccine coming out, more people are protected from the virus, therefore Zoom will be used less. I think people are beginning to understand the value of in person meetings and how much more can be done that way. The number of subscriptions by schools and universities will greatly decrease possibly next year, and all that may be left are occasional meetings to reduce travel or large group webinars to make them more inclusive. With this I think the stock price will greatly drop over the coming months.
It is quite surprising how much zoom actually grew in the span of only two-ish years, and it is even more surprising how it was able to beat out skype, discord, and Microsoft Teams for practically the entire market share. Now that zoom has reached the success it has the question becomes, what is next? What will zoom do or plan to do to either evolve what they have now or innovate something new? Great Post!