Video-conferencing company Zoom soared during its debut as a public company.
Shares were up more than 72% at the end of its first day of trading Thursday, to $62 a share. Zoom (ZM) had priced its IPO at $36 per share. It was valued at just under $16 billion when the markets closed.
The company was the second highest-profile technology IPO on Thursday, overshadowed in hype by social site Pinterest (PINS). Pinterest (PINS) had a solid showing on its first day, ending 28% higher than its IPO price. But it was vastly outperformed by Zoom.
“There was some worry about unicorn IPOs after Lyft (LYFT) disappointed but Zoom and Pinterest show there’s an appetite for highly valued startups,” Matt Kennedy, an analyst at Renaissance Capital, told CNN Business. “It’s [growing] blazing fast and highly profitable. It wasn’t cheap when it priced its IPO, but despite it being given premium valuation it surged further today.”
Kennedy said it’s extremely rare for a company valued at $10 billion — Zoom was valued similarly before Thursday’s IPO — to have such a surge in share prices. The last company to do so was Twitter in 2013.
Zoom was founded in 2011 by Eric Yuan. Yuan, who is from China, came to the United States in 1997 after eight failed attempts at getting a visa over the span of about one-and-a-half years. He succeeded on the ninth try, he said in interview in July with GGV Capital, a venture capital firm.
Yuan said he was inspired to move to Silicon Valley after hearing a speech given by Microsoft founder Bill Gates several years prior. He said, looking back, it was a lesson in perseverance. Once he got to the United States, he said, “I realized, wow, it’s the first wave of the internet revolution. I don’t think I want to miss that.”
Yuan started by writing code at the web-conferencing company Webex, which was ultimately acquired by Cisco in 2007 and is now known as Cisco Webex. Prior to joining Zoom, he was a corporate vice president of engineering at Cisco.
Yuan says he didn’t intend to stay in the United States more than a few years, but eventually “the thought to go back faded away.”
Zoom is not to be confused Zoom Technologies (ZOOM), a small Chinese wireless communications company. However, some investors might have confused the two: Zoom Technologies (ZOOM)’ stock also got a boost Thursday. The stock finished the day up 10%, though it had been up much higher earlier in the day. It is now worth $2.70 a share.
