Zoom shares fall after Tuesday’s 40% rise

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Eric Yuan, Founder and CEO of Zoom Video Communications Inc., speaks during the BoxWorks 2019 conference at Moscone Center in San Francisco, California, United States, Thursday, October 3, 2019.Bloomberg

Zoom’s shares fell more than 8% after trading opened on Wednesday, with investors likely taking profits from Tuesday’s market surge.Shares of the video conferencing software company climbed 41% on Tuesday after reporting second-quarter full-year earnings above analyst expectations and raising its full-year guidance. The company said its revenue more than quadrupled during the quarter.

The company, which went public in April 2019, still has a market capitalization of around $ 118 billion. It was worth $ 25 billion a year ago.

Zoom has benefited greatly from the Covid-19 pandemic, as employers and educators turn to software to replace in-person meetings and lessons. Zoom averaged 148.4 million monthly active users in the quarter, up 4,700% year-over-year, RBC analysts led by Alex Zukin wrote in a note distributed to clients on Aug. 17, citing data from app analytics startup SensorTower.

Zoom now ranks among the most valuable US technology companies, with a market capitalization larger than IBM and VMware.

– CNBC’s Jordan Novet contributed to this report

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