I have invested a large position of savings into Zoom at 170.57, and the price just dropped significantly all of a sudden. I was a newbie and failed to work out an exit plan. Zoom’s price keeps dropping continuously on Monday pre-market. The ticker ZM is too risky for me, I am too worried now that I might not be able to exit in the near future.
How can Zoom even not hold up a news from FB? It appears that investors don’t trust Zoom, they simply short-term trade this ticker.
Zoom was heavily bid up recently on news of free accounts massively juumping (to 20x then 30x december values). These were not users that Zoom want (as they have an enterprise monetisation strategy)and in fact they lose a ton of money hosting these users. However, the mind share gains of Zoom in this period were viewed as long term assets, as well an potential long term changes in WFH trends, and investors were starting to hope for consumer monetisation (to me trying to sell a paid video conferencing product to the average person is a total non-starter and there is no obvious way to advertise in video conferencing beyond maybe $0.5-1 ARPU which is not meaningful to them).
The news that FB launched a new product somewhat pierced this consumer bubble and reminded of the intense competition in this space (FB GOOG MSFT all have free products). Also, on consumer side compare Snap - similar DAUs to Zoom, much more obvious monetisation, yet zoom’s market cap increase this year is greater than value of Snap. The key for Zoom is to take share in enterprise and attempt to massively expand this category. The stock is priced for them increasing the paid videoconferencing enterprise market 10x and capturing all of the incremental business vs MSFT, Cisco and others. Not impossible - look at growth today - but that is their task.
FB entering this space is not a meaningful long-term change IMO to Zoom.
It appears that investors don’t trust Zoom, they simply short-term trade this ticker.
I’d change that to “It appears that TRADERS don’t trust the Zoom stock”. But the real question for investors is: can we trust Zoom as a company.
From my own experience, I’ve not seen any significant drops in use of Zoom in my working environment. The feedback about usability, performance, feature set and pace of innovation/development is ubiquitous positive. Of course, e.g. Jitsi is very often mentioned for being free and open and secure. But that is with a vocal minority of people. I still see the same amount of zoom meetings mentioned in the press, I held 90% of all my video conferences in Zoom, with various companies involved. The bad press about security issues, which has been judged by some trustworthy sources to be overblown (maybe even a hit piece mechanism by shorts and/or competitors), is already fading a bit.
The last time I have seen a brand name being so quickly and broadly adopted, even turned into a verb which is used for the use of competing products (“hey, let’s zoom with skype”) was with the iPad. The bad press about the “silly, useless, unattractive, dumb, unprofessional” name was loud. Now, I hear tons of people saying they use the iPad, the Lenovo or Microsoft “iPad”.
Personally, I think this is very significant in the judgement of long term investing. Zoom seems to widthstand the loud and ugly press coverage quite good and they are so extremely well positioned that the only way they might not be a MUCH higher stock in 5 years is by being bought by a competitor.
Moma, this board is not for personal advice. We can’t tell you what to do. We are not financial advisors. We don’t know your age, income, dependents, expenses, savings, or any of the rest. You have to make your own decisions.
Sorry,
Saul
This is to Raptor (not sure I’m replying correctly?)…lol Thanks! I’m new (and a Momma) too lol.
I didn’t see the original post, but…I’m feeling a little nervous about zoom as well. However, I read (and re-read) all the profile info Fidelity shows me, and also the info here on Fool, so despite my nervousness I’m trying to stick it out and am trusting the Fool.
Yes, it’s a bit risky for me, but I have very little to work with, and am now on early retirement/disability so fixed income…and need more aggressive actions cuz I want to buy my farm (real-with animals and everything lol) before I’ve “bought the farm” so to speak lol. Soo…I’ll take the advice from a stranger on the internet (you, the Fools, etc) since I can’t always rely on my “gut instincts” to pick the best investments…as shown by my stupid purchase of SCWORX stock and not dumping it when it nosedived…smh… Live and Learn!
I didn’t see the original post, but…I’m feeling a little nervous about zoom as well. However, I read (and re-read) all the profile info Fidelity shows me, and also the info here on Fool, so despite my nervousness I’m trying to stick it out and am trusting the Fool.
First of all I suggest not trusting the fool or anyone in particular. You need to do some reading and research and there are lots of suggestions in the archives of this board.
As for Zoom and its future here are a few items that represent elements of the advantageous position that that Zoom has.
Worldwide recognition. Their TAM is the world.
2.A large collection of satisfied business users. A secure and growing market share.
3.A product that works better with more features than any other.
4, Time ,money and effort required for a competitor to replicate those features and to “get it right” i.e. A big head start in producing a standard of performance not yet matched.
Over 300 million new users .and an unknown number of users being added each day.
6.The experience of having to deal with a series of security issues. Yes , I see this as a positive feature because in addition to its other leads Zoom is early out of the box in addressing security problems common to all conferencing platforms. They have engaged the best security people and are installing the best system for addressing and solving security issues. They are introducing optionality and flexibility that will be hard to duplicate. I venture to suggest that before its over they will become tho ‘go to’ platform for secure application.
A CEO/founder/owner who is 100% committed to customer satisfaction and to ‘getting it right’, to providing the best possible customer experience.
