Zoom: Video service shares fall, although the company is growing explosively

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The video service Zoom is or was one of the stock market stars of the crisis year 2020

Photo: Mark Lennihan / AP

The corona crisis is having a hard time affecting the economy, but there are also beneficiaries of the pandemic.

One of them is the Zoom video service.

The company continued to grow explosively in the past quarter, but it's not growing fast enough for investors.

After the announcement of the new business figures, the Zoom share temporarily fell by around eight percent.

Sales jumped within a year from $ 166.6 million in the third quarter to a good $ 777 million.

In the third quarter of fiscal year ended October, the year-on-year profit even shot from 2.2 to 198.4 million dollars.

The increasing profit is based on a majority of users who opted for a paid subscription model, as the company announced.

The US company now has 433,700 customers with more than ten employees, an increase of 485 percent.

Zoom Video is also confident for the current quarter and expects revenues between $ 806 and 811 million.

That is more than analysts expected.

The after-hours price slide could be related to the fact that Zoom expects higher customer churn than usual between October and December.

The company justified this with the higher proportion of customers who only booked monthly subscriptions.

Another reason could be investor concerns that Zoom is already at its peak.

The AP news agency writes.

One of the winners of the corona crisis

Zoom had moved into a new league with the corona crisis.

The company was originally supposed to provide video conferencing for companies.

In the pandemic, however, not only did it increase its use in companies, but also private individuals increasingly use Zoom - for family gatherings, for example.

How much the company benefited from the corona crisis became apparent after the company Biontech announced that it had found a corona vaccine.

While the shares of pharmaceutical companies shot up, Zoom collapsed by more than twelve percent on the stock exchanges.

Investors who continue to rely on Zoom assume, according to the AP, that the company will keep many subscribers even after the corona crisis.

Accordingly, corporate customers will continue to rely on home office and limit business travel, which makes a video conference tool essential.

The company founded in San Jose in 2011, which has since struggled with security gaps, for example in encryption or so-called zoom-bombing, is not without competition.

Video calls and conferences are also possible via Microsoft Teams, Webex from Cisco or offers from tech giants Google and Facebook, for example.

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hba / dpa / Reuters / AP