The company announced an underwritten offering of $1.5 billion shares of its Class A common stock
The shares of Zoom Video Communications Inc (NASDAQ:ZM) are up 0.8% at $340.45 at last check, after the company announced an underwritten public offering of $1.5 billion shares of its Class A common stock. The video-conferencing name has also granted J.P. Morgan (JPM), the sole underwriter on the deal, a 30-day option to purchase up to $225 million additional shares of stock at the public offering price.
The security benefitted greatly from the pandemic due to lockdown restrictions and a massive shift to remote work. However, since hitting an Oct. 19 all-time high of $588.84, shares have been chopping lower, with pressure at the 30-day moving average putting a cap on several rally attempts during this time period. Despite this descent, Zoom stock is still up roughly 354.9% year-over-year.
Analysts have been hesitant, too, with some changing their tune in the weeks following ZM's post-earnings plummet. Currently, the security carries 11 "hold" or worse ratings, compared to nine "buy" or better ratings. Meanwhile, the 12-month consensus price target of $487.20 is a 43% premium to current levels.
Short sellers have been building their positions as well, with short interest up 23.9% in the last two reporting periods. Now, the 9.9 million shares sold short make up a solid 30.8% of the stock's available float, or 1.1 days of trading at the equity's average daily pace.
Lastly, ZM's Schaeffer's Volatility Scorecard (SVS) sits at 96 out of 100, indicating it has tended to exceed option trader's volatility expectations over the past year -- a boon for options buyers.