Zoom set to raise $1.75bn through discounted stock offering

Zoom shares have gained more than 380 per cent in the past 12 months, reflecting the demand the company has seen for its services during the pandemic

Video-conferencing company Zoom is set to raise $1.75bn through a stock offering in New York. AP

Zoom is raising $1.75 billion through a stock offering, capitalising on enduring demand for the video-conferencing platform during the pandemic.

Zoom is selling about 5.15 million shares at $340 per share, representing a 4.7 per cent discount to its last close, according to a company statement on Tuesday. The offering is expected to close on or about January 15.

The company has given its underwriter a 30-day option to buy as much as an additional 735,294 shares of its Class A stock at the public offering price, excluding underwriting discounts and fees, according to the statement. JPMorgan Chase is the sole bookrunner for the transaction.

The stock closed up 5.7 per cent on Tuesday in New York.

Zoom shares have gained more than 380 per cent in the past 12 months, reflecting the demand the company has seen for its services as people work, learn and socialise on their computers. The stock has become a barometer of the pandemic economy, rising when Covid-19 lockdowns emerge and falling on good news about vaccines.

Chief executive Eric Yuan has tried to diversify Zoom’s capabilities for large enterprises, small and medium-sized businesses and individuals so the company can grow after the coronavirus is controlled and more workers return to their offices.

In Zoom’s latest earnings report, it suggested that revenue growth in 2021 may be slightly less explosive than it was last year. Still, Zoom said it expects an increase in sales of 330 per cent in the current quarter, which ends in January.