Well, haven’t I got egg on my face?
What happened to Zoom’s Five9 merger?
The deal has gone the way of the dodo — that is, if the dodo had a dedicated board of shareholders who thought their existence simply shouldn’t continue.
And that’s what basically happened. Despite Zoom playing the role of a scorned lover and calling it a “mutual agreement”, reports indicate that the $14.7 billion all-stock offer for the cloud contact software center was rejected by Five9 shareholders.
There are a number of reasons for this rejection, including the fact that Zoom shares have lost almost a quarter of their value since the deal was announced in July, as well as ongoing antitrust investigations into the agreement.
So, is this a disaster for Zoom?
Not really. Sure, it slows down Zoom’s plans to enter the call-center-as-a-service (CCaaS) market — does everything need an ‘aaS’ these days? — but CEO Eric Yuan appeared unperturbed at a press conference last night, stating:
“It [the deal] was in no way foundational to the success of our platform, nor was it the only way for us to offer our customers a compelling contact center solution.”
And, as we’ve mentioned many times before here at MyWallSt, mergers and acquisitions actually often end up being bad news for investors, so perhaps this is a case of a dodged bullet?
Either way, life will go on for Zoom, which is still experiencing fantastic growth and expects to bring in record revenue of $4 billion and earnings of $4.77 per share this fiscal year. So, no need to panic sell on one failed merger.
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Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.