While many businesses are being forced to shut down because of the coronavirus outbreak, some businesses are particularly thriving. Companies such as Amazon, Target, and other chain superstores are thriving as many smaller stores are being forced out of business. However, as I was watching my daily Zoom lecture from my math professor, I couldn't help but wonder: how are Zoom stocks doing amidst the covid-19 outbreak?
Extraordinarily well. The stock is up 7.47 percent as of March 27, 2020, which is pretty huge. Zoom's stock value has more than doubled since the beginning of 2020, and part of that doubling can certainly be attributed to the covid-19 outbreak. The demand for video calling has surged very recently, and with Zoom lifting time restrictions and restrictions on groups over 40 people for schools and other businesses, they are gaining quite a large userbase. Some universities are now affectionately calling themselves "zoom universities," i.e. UCLA's UZLA renaming.
However, as with all highs comes a low. Is Zoom a safe choice for investors long-term? Probably not. The video-calling industry is estimated to be worth 6 billion. Zoom, however, is estimating itself to be worth 40 billion right now. This overinflation may make Zoom due for a market crash given time, making it not a safe choice for the long term investor.
However, while it can take advantage of the covid-19 outbreak, Zoom continues to do so. Perhaps Zoom will have a loyal, dedicated userbase after the end of the outbreak. It seems like that may be the case. We won't know until this is all over though. We'll see when it ends.
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ReplyDeleteThis is very interesting, I've never thought about how well Zoom was doing. Although, I agree that once we go back to school, Zoom will inevitable face a market crash due to this overinflation. However, because of this outbreak, Zoom has built a strong enough reputation for itself that many people, after this is all over, will begin to use it more frequently for projects, work conferences, etc.
ReplyDeleteRight now, since there are no other resources, video conference resources such as Zoom are gaining significant traction and attention, especially with a lot of "memes." This has made the company more well-known, and even though there will certainly be fewer users after the COVID-19 Pandemic, I think that this current surge of publicity will help them in the long-term as a major player in the video conference industry.
ReplyDeleteI found this read to be extremely interesting. However, I'm curious as to why Zoom is the go-to video conference application. As far as I'm aware, applications such as Google Meet or Discord also provide platforms for group video calls that involve screen sharing, is there something else about Zoom or is it just random chance?
ReplyDeleteZoom positioned themselves very well early on in the pandemic by offering free service to a large number of people/organizations. Moreover, it had time to spread in the work-from-home period before quarantine, due to its market position as enterprise software. At that point, it could spread organically from user to user.
DeleteI believe it's continued growth is sustained due to the following:
- Simplest onboarding workflow out of any video application, except Google meet. Click a link, and you're in, the app basically installs itself, or you can fallback to web. No account needed.
- Independence from other products. This is the one place Google Meet fails. It requires a corporation be on GSuite, and many aren't.
- Reliability. Most video chat products are reliable these days, but many users have had bad experience with older platforms that have recently improved, such as Skype. Zoom had the late-mover advantage of being the new hotness.