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Zoom Shares Plunge Despite Strong Earnings Report

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Zoom’s Share Price Plunge to $341.57 as Investors Dumps Holdings

Zoom Shares plunged on Wednesday despite a strong fourth-quarter earnings report filed on Monday.

The video calling software maker posted earnings per share of $1.22, against 79 cents per share predicted by analysts.

Revenue stood at $882.5 million, more than the $811.8 million expected by analysts, according to Refinitiv.

On a yearly basis, revenue grew by 369 percent in the fourth quarter that ended Jan.31, 2021, slightly more than the 367 percent increase recorded in the previous quarter. Thanks to lockdown that forced many people to adopt Zoom globally following the COVID-19 outbreak in China.

The company expanded its gross margin from 66.7 percent achieved in the third quarter to 69.7 percent in the fourth quarter. The slight increase was as a result of the drop in audio usage due to the holidays, stated Kelly Steckelberg, Finance Chief, Zoom.

Zoom ended the fourth quarter with $4.24 billion in cash, cash equivalents and marketable securities, up from $1.87 billion recorded in the third quarter.

According to Steckelberg, the company is looking to acquire companies with its huge cash, however, she said “We just haven’t quite found the right match yet.”

The company added 467,100 customers with more than 10 employees during the period under review. That represents a 470 percent increase over the same quarter of last year.

1,644 customers contributed $100,000 in trailing 12 months revenue, up approximately 156 percent increase from the same period of last year.

Why Zoom Shares Plunge Despite Strong Performance

Global investors are no longer keen on Zoom shares given the slow down in the COVID-19 crisis and better COVID-19 vaccine distribution. Stock investors are predicting a slow down in growth in 2022 fiscal year, especially with businesses reopening and people expected to resume normal operations later in 2021.

Also, the company’s projection for the 2022 fiscal year revealed that management only sees 42 percent growth in revenue to $3.77 billion and adjusted earnings per share of $3.62, an 8 percent increase, against the 326 percent increase in revenue posted in 2021 fiscal year.

Zoom’s share price plunged from $437.01 on Tuesday to $341.57 on Wednesday as investors continue to whine down on their holdings.

Eric Yuan, the company founder and Chief Executive Officer, remains optimistic ahead of 2022.

He said, “As we enter FY2022, we believe we are well-positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers.

 

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Nigerian Stock Exchange

Stock Investors Lose Another N11 Billion on Wednesday

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Nigerian Exchange Limited - Investors King

The Nigerian Exchange Limited (NGX) extended decline on Wednesday as sentiment remained weak across the Exchange.

Investors exchanged 155,773,059 shares valued at N1.510 billion in 3,256 transactions during the trading hours of Wednesday, in contrast to 184,442,908 shares worth N2.343 billion that exchanged hands in 3,809 transactions on Tuesday.

Market value depreciated by N11 billion to N20.243 trillion on Wednesday, further down from N20.254 trillion it closed on Tuesday. While NGX All-Share Index dipped by 0.05 percent to 38,852.69 index points.

Transcorp Hotel Plc led gainers with N0.45 or 10 percent. Followed by Pharm-Deko Plc’s N0.16 or 9.88 percent gain. See the details below.

Top Gainers

Symbols Last Close Current Change %Change
TRANSCOHOT N 4.50 N 4.95 0.45 10.00 %
PHARMDEKO N 1.62 N 1.78 0.16 9.88 %
CONOIL N 22.35 N 24.55 2.20 9.84 %
CORNERST N 0.49 N 0.53 0.04 8.16 %
NEM N 1.90 N 2.00 0.10 5.26 %

Top Losers 

Symbols Last Close Current Change %Change
VERITASKAP N 0.23 N 0.21 -0.02 -8.70 %
UCAP N 9.00 N 8.55 -0.45 -5.00 %
CHAMS N 0.22 N 0.21 -0.01 -4.55 %
ACCESS N 8.90 N 8.60 -0.30 -3.37 %
JAPAULGOLD N 0.47 N 0.46 -0.01 -2.13 %

Top Trades

Symbols Volume Value
UNIVINSURE 19040500.00 3808100.00
UBA 18778552.00 143097682.80
ZENITHBANK 11757422.00 268830997.45
GTCO 10015581.00 271262745.25
UCAP 8519588.00 74569386.55

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Bonds

Investors Renewed Confidence In Nigeria’s Economy Leads to Oversubscribed Eurobond

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Bonds- Investors King

The Debt Management Office (DMO) revealed that the $3 billion Eurobond offer was heavily oversubscribed, noting that investors were ready to invest $12.2 billion.

Consequently, the government decided to increase its initial offer value from $3billion to $4billion.

According to a statement on Tuesday night by the Debt Management Office (DMO), investors from, Nigeria, Europe, Asia and America demanded $12.2 billion for the notes.

“This exceptional performance has been described as ‘one of the biggest financial trades to come out of Africa in 2021 and an excellent outcome”, said the DMO in a statement.

“The size of the Order Book and the quality of investors demonstrate confidence in Nigeria”, the DMO said.

Nigeria opened its order book for the bond offering on Tuesday, aiming to issue the bond next week, according to a notice to investors.

The country issued the debt in tranches of three tenors.

It raised $1.25 billion for seven years at a yield of 6.125 percent and sold a 12-year bond at 7.375 percent to fetch $1.5 billion. A 30-year tranche of $1.25 billion was sold at 8.25 percent

The government had arranged a two-day call with investors last week and on Monday, with the DMO saying that the bond would be priced following the meetings.

The notice was set for Sept. 28 for the bond settlement, which will be listed on the London and Nigerian Stock Exchanges.

The Eurobonds are part of a government plan to raise 2.343 trillion naira ($5.71 billion) in external financing to help fund spending in 2021 and to partly finance the 5.6 trillion naira deficit.

“The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 – 2023”, the DMO said.

“Since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of USD4 billion through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act”, it added.

Nigeria picked JPMorgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners, and local firm Chapel Hill Denham on the forthcoming Eurobond issue

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Bonds

Nigeria Opens Order Book For $3B Eurobond

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Eurobonds - Investorsking

Nigeria opened the order book for a $3 billion Eurobond offering on Tuesday, aiming to issue the bond next week, according to a notice to investors seen by Reuters.

The country is aiming to issue the debt in tranches of three tenors – a seven-year at a yield of 6.5 percent, a 12-year bond at 7.75 percent and a 30-year at up to 8.625 percent.

The government arranged calls last week and on Monday with global and local investors ahead of the planned issue.

The debt office has said the meetings will precede pricing for the bond to raise up to $3 billion but not more than $6.2 billion.

The notice was set for Sept. 28 for the bond settlement, which will be listed on the London and Nigerian Stock Exchanges.

The Eurobonds are part of a government plan to raise N2.343 trillion ($5.71 billion) in external financing to help fund spending in 2021 and to part finance the N5.6 trillion deficit.

Nigeria picked JPMorgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners and local firm Chapel Hill Denham on the forthcoming Eurobond issue.

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