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.
Learn more about growth investing and what stocks make great investments by starting your free access with MyWallSt right now. Subscribe here to start generating long-term wealth.
Content Manager 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.