Some folks are using Zoom stock as an example of the pain that some Americans would suffer if the Democrats’ plan to tax unrealized capital gains were implemented. They posit a prescient investor who paid $100 for the stock just as coronapanic was unfolding, then got taxed based on the $337/share price at the end of 2020, and just held onto the stock for the ride back down below $100 (remember that the loss in real dollars is even more severe; adjusted for purchasing power, the $100 paid in 2020 had a purchasing power of closer to $200 today, e.g., for a house):
Today’s topic is not the wisdom of forcing successful Americans to pay their fair share, but on how the Zoom price today can be lower than the Zoom price before coronapanic. Zoom was worth $92 per share in August 2019, for example, before SARS-CoV-2 had infected even a single human, with or without a cloth mask to protect him/her/zir/theirself.
Given that Zoom was a curiosity in 2019 and is something that hundreds of millions of people today still use regularly, how can the company be worth less?
Let’s also consider the purportedly efficient market and the purported wisdom of crowds of investors. Zoom had potential, so it was worth a lot in 2019. What would have been an impossible dream for Zoom investors? How about governors all around the U.S. making it illegal for people to meet in person (except at liquor and marijuana stores in California, Massachusetts, etc.)? U.S. state and local governments did more for Zoom than investors could ever have hoped for and yet the company still hasn’t lived up to the expectations of 2019.
How did the investors of 2019 get it so wrong?
Microsoft Teams
Zoom is a fantastically better product than it was in March of 2024, with better performance and all kinds of bells and whistles. Maybe hiring all those developers cost a ton of money (and stock) and messed with the potential profitability and value?
Or maybe it’s just not cool anymore.
Funny to watch our day job migrate from bluejeans to zoom finally in 2023 only to have Zoom quickly become irrelevant compared to this year’s blockbuster. What a crummy agile development, super slow react app.
Microsoft Teams ate Zooms lunch. You’ve all gotta pay for Word, Excel etc and Teams is basically bundled with that.
There is an old adage in investing: “buy on rumours, sell on news”. Those who bought Zoom when rumours were it would soon be huge then sold when news confirmed it, did very well. Those who bought after news confirmed Zoom was now huge, did very badly.
It cost me a fortune to learn this (not with Zoom).
Do not see MS Teams taking over Zooom market. Maybe over Webex market. Think Zoom is comparatively undervalued. New CEO would do wonders of its stock price.
Are you honestly claiming the stock market has any correlation with value these days (I should probably say decades) rather than hype and manipulation?