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Where is Zoom Headed?



The one thing that everyone knows about Zoom (Nasdaq:ZM) is that it has been a beneficiary of the virtual nature of office interactions since the onset of the pandemic. 

It is nice that worked out for them but, what do they do for an encore? 

For one, they want to expand their business lines, and to this end they want to buy Five9 Inc., a provider of could-based call center software. 

The management of FIVN has signed off on the deal, pending stockholder approval. But that approval may be tricky. 

ISS, the leading stockholder advisory service, is counseling FIVN stockholders to vote "no."  ISS is concerned about the stock-swap nature of the deal. Five9's stockholders aren't going to get any cash. They will turn in their shares of Five9 and receive shares in the combined company according to a fixed ratio. ISS says that the shares of Zoom are, the those of the combined company will be, too volatile to make this fair.  

This objection raises a lot of further questions: why was the deal structured that way? if it is seriously in trouble, couldn't Zoom simply sweeten the pop by making some portion of it cash compensation? Don't they have cash on hand? 

But ... along comes another line of attack. The deal is now being called into question by a faction within the US government.

Why? because Zoom is too Chinese, and a corporate equivalent of miscegenation laws may apply here. 

Fight on, Zoom. Fight on. 


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