Why I Still Love Zoom

I’ll leave the numbers to the others who frequently post here when it comes to revenue growth and such. I’m more of a product fit kind of guy. When we look at Shopify in it’s earlier stages the most compelling reason to buy it then was that everyone knew that e-commerce was the future and Shopify had a cheap compelling turn-key solution that anyone could start an internet business online with a purchase of a modest priced subscription.

I see the same reason why entrepreneurs who want to sell information or entertainment based services could do the same on Zoom. Right now if you are subscribed to Rule breaker or Stock Advisor I believe you can tap into a product called Fool live where interactive videos of Fool analyst like Tim Beyers do deep dives into the companies that are talked about here. Recently, they even interviewed Beth Kindig which makes for very good investment content. But all of this content is made available by Zoom and if you missed it live you can search it and view the recording.

Beth’s service started doing Zoom live webinars also. If your familiar with IBD they also have an IBD LIVE platform via Zoom which they talk to you about what there trading in real time sort of like Twitch does for gamers. There are so many traders who have gotten traction on YouTube that are using Zoom as the platform to broadcast live publicly but are now offering paid services using Zoom where there is a paywall and you get in by registering your email address, which is gold in business. But that’s just investing information services.

Recently, I and hundreds of other people from all over the world paid to have a guide take us through a
Virtual Bible Tour at the British Museum in London. Me and the wife enjoyed it so much that we booked another tour that will be given at the Louvre Museum in Paris. How many people in the world hate planes but love experiences will just stop these behaviors once things open up?

Pinterest is partnering with Zoom to bring many of these information based services to the world. Imagine companies like TicketMaster doing the same and live broadcasting all types of experiences all over the world for a small fee?

Another point, many of the school and other services are provided free by Zoom and though they benefit from the marketing they are not getting revenue from them anyway. As the world opens back up, would they not have lesser infrastructure costs? Would that even more improve reliability? I don’t see why this company can’t be seen as a combined YouTube and Shopify flywheel of information and entertainment services of the future as well as what it is already doing for business communications. That optionality!

This one is difficult to hold short term because of headline risk but it’s equal risk selling your stake and watching it take off like the Trade Desk, Twilio or Shopify has done. As astute institutions have bought these companies up when sentiment is low and taken the access supply off the market.

Will Zoom experience the same effects? We will find out shortly. Thanks for reading!

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There are many reasons to love ZM.

Here’s another. https://www.cnbc.com/2020/12/14/google-ceo-email-delays-retu…

Google announces work from home until Sept 1st. I’m hearing from a MSFT friend that they will announce the same thing. I’m also told that once we are past this pandemic MSFT is going to do a partial work from home model. Corporations are seeing the benefits of work from home and I think there will be at the very least a hybrid model.

I sold 30% of my ZM higher, but have been looking for a reentry on a sell off. If we get another fall around 370 I’m going to start nibbling back in.

TMB

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Google announces work from home until Sept 1st. I’m hearing from a MSFT friend that they will announce the same thing. I’m also told that once we are past this pandemic MSFT is going to do a partial work from home model. Corporations are seeing the benefits of work from home and I think there will be at the very least a hybrid model.

How does this help ZM?

From the article:
Pichai’s note says the company will be creating in-office presentation booths “designed to send professional-quality broadcasts to large, distributed audiences.” It will also be improving its Meet and Workspace products to “better bridge the gap between colleagues working from the office and those working from home.”

People had been working remote way before ZM and will continue doing so. I don’t necessarily see it as benefitting them. I’ll be working remote at least until June next year but my company has no plans on getting ZM. They’ll continue using web-ex productivity tools that were being used while we were in-office.

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Sunny,

I think it’s pretty obvious how more companies allowing remote work in at least a hybrid work model provides a tailwind to Zoom’s core revenue stream. Maybe not this specific announcement since it is Google and they have their own VC tool, but more and more companies will be pushed into doing this in order to attract top talent. Oracle just announced their HQ move to Austin, TX and that they will allow permanent remote work if desired.

This will become more and more common as companies will continue to adopt remote work options to attract top talent. Zoom will continue to eat into WebEx customer base over time. It is a dinosaur and even my old slow company switched from WebEx to Zoom during the pandemic because WebEx wasn’t getting the job done.

Bnh

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I think OnZoom has big potential - including competing with YouTube. Content creators now can use OnZoom to sell their content (like Locals and not YouTube). Maybe, OnZoom can figure a way out to monetize OnZoom calls and compensate creators without the demonetization police like YouTube. (Maybe they have already). Lots of content creators are frustrated with YouTube sometimes arbitrary policies.

Mike

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“How does this help ZM?”

Well of course my point wasn’t about Google specifically or Microsoft for that matter as they have Teams, it’s about a worldwide new work environment that’s now proven to work. Most office jobs can be done from home full time or at least part time now.

It’s a different world and companies like Zoom are very much part of the new office.

Beth Kindig believes that Zoom will be as big as the FAANG names in the future. They make the right moves going forward I could see it.

TMB

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I’ll leave the numbers to the others who frequently post here when it comes to revenue growth and such. I’m more of a product fit kind of guy.

We all have our way of investing. To apply the above to myself, I’m a business model kind of guy when it comes to picking stocks but a bit of a TA kind of guy when trading the stocks.

As to Zoom’s business model, I believe that Zoom will continue to be one of the great covid-19 beneficiaries even after we get the pandemic under control because the pandemic has highlighted the benefits of working and meeting remotely and there is no going back. That does not mean that everything will be remote any more than all conversations are over the phone.

As to the TA, the rise of ZM, the stock, from $68.04 on December 31, 2019 to an all time high of $588.84 by October 19, 2020 (765%) is clearly unsustainable. There are a couple of TA methods that help to put it into perspective and help us plan for how manage the stock. This is not a precise forecast by any means, just ideas of what to expect…

The long term stock chart: https://softwaretimes.com/pics/zm-12-15-2020.gif

It is usual for growth stocks to drop by 50% without the company story deteriorating, driven instead by market action. In the chart there is a gap up at the beginning of September. TA says that gaps tend to close. For this gap to close ZM would have to fall to around $325, that’s a rather usual 45% drop (I’m not saying it’s going to happen). The Garter Group came up with the Hype Cycle. Pay attention to the illustration to the right and try to visualize how it fits ZM’s trajectory…

https://en.wikipedia.org/wiki/Hype_cycle

Peak of Inflated Expectations October 19, 2020

Trough of Disillusionment Late 2020, early 2021

Slope of Enlightenment starting in 2021 and going forward should produce very nice Saul level returns until it reaches the Plateau of Productivity which is likely five to ten years in the future.

I don’t consider this OT because it’s not TA trading, it’s just a bird’s eye view of how the market works. I took profits three times between July 20 ($268.90) and October 20 ($574.70). Currently ZM shares top position with TSLA in my portfolio. Because it’s such a large position, I might add if it drop low enough, otherwise it’s a hold until profit taking time comes around again.

Denny Schlesinger

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…supporting your longer-term point, Larry Ellison just announced he would use “the power of Zoom” to run his soon-to-be-based-in-Texas Oracle from his new home in Hawaii:

Following Friday’s announcement… I’ve received a number of inquiries about whether or not I will be moving to Texas," he wrote in an email. “The answer is no. I’ve moved to the state of Hawaii and I’ll be using the power of Zoom (NASDAQ:ZM) to work from the island of Lanai.”

https://seekingalpha.com/news/3644283-ellison-moves-out-of-c…

Cheers!
Murph
BL and PRE Home Fool
(long ZM; sold ZM $280 Puts )

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