Zoom - Another little reality check

Zoom - A little reality check

Zoom opened last Thursday at $65.00 after its IPO. Since then it has bounced around but is currently, three trading days later, at $63.20, down 2.8%. My portfolio is up 5.9% in those same three days. That means that $1000 invested in my stocks would be doing 8.9% better than $1000 invested in Zoom. (1059 divided by 972 equals 108.9)

I tried to explain in an earlier post, that there was nothing wrong with Zoom, the company, and I had even set aside a little cash to take a position in it, but when it opened at an EV/S four times as high as Shopify had opened at after its own IPO (Shopify was also growing revenue at 100% at its IPO), the first 400% of gains were already priced in. Mind you, Zoom didn’t open at 40% higher; it was four TIMES as high! Think of it!

I have little doubt that Zoom the company will do well. It’s just hard for me to see where ZM the stock can go at this price.