Zoom Video Communications shares slipped lower on Tuesday, January 12, 2021; after the online conferencing group said it plans to sell around $1.5 billion in new stock.
Zoom said it would sell around 4.45 million of its Class A common stock through an offering lead by JPMorgan Chase & Co, noting in a Securities & Exchange Commission filing that $1.5 billion proceeds generated from the sale would be used for ‘general corporate purposes’. The so-called mixed-shelf filing also includes the prospect of issuing new debt securities.
Zoom shares were marked 3.1% lower in premarket trading on the Nasdaq; to indicate an opening bell price of $327.20 each; a move that trims the stock’s six-month gain to around 25%.
Also Read: Zoom: How to change your background
The move still leaves Zoom shares some 350% higher than at the start of the year; with gains driven by a surge in the use of its conferencing and meeting tools; during both the peak and subsequent waves of the global coronavirus pandemic.
Several companies, in fact, have used last year’s meteoric stock moves to raise equity capital; with insurance provider Lemonade Inc (LMND); saying earlier Tuesday it would sell 3 million shares of its stock through an underwritten offering; including 1.5 million from existing holders and 1.5 million from the company itself.
Lemonade shares were marked 5.4% lower in pre-market trading at $173.40, but that would still leave the stock with a 52-week gain of around 150%.
Last month, Tesla Inc (TSLA) – Get Report unveiled the ‘at-the-market’ offering for the sale of around $5 billion worth of shares following its inclusion into the S&P 500 benchmark and a 2020 gain of around 750%.