ZM would have been able to significantly increase its total addressable market (‘TAM’) to at least $86 billion and that is even prior to accounting for TAM from automation. Why Did Zoom Want to Acquire Five9?Īt first glance, the merger with FIVN would have made a lot of sense. ZM is trading around $257 per share, down around 40% from all time highs.Īs a long term investor, I am typically unfazed by near term volatility (though I am not a shareholder in ZM), but the falling stock price has had implications for its underlying business because it has led to a fall out in its merger agreement with FIVN. I explain why I am upgrading the stock to a buy rating in spite of widely expected deceleration in growth rates. Has its “zoom” upwards come to an end? In this report I look at what’s ahead for ZM as it moves beyond this failed merger agreement. This came after its stock showed some of its weakest relative performance in recent times. At the end of September, Zoom ( NASDAQ: ZM) announced that it has terminated its merger agreement with Five9 ( FIVN).
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