Zoom Video Communications Inc.
Founder Eric Yuan transferred about 40% of his ownership in the company he runs, a stake valued at about $ 6 billion, after Zoom shares tripled last year.
The transaction was recorded as two gifts of nearly 9 million shares each, to unspecified recipients and from two trusts of which Yuan and his wife are co-trustees, according to a securities filing held late Friday.
In a statement, a Zoom spokeswoman said that “the distributions were made in accordance with the terms of the Eric Yuan and his wife trusts, and are consistent with typical Yuan estate planning practices.” The company did not say who now controls the shares. Yuan and his wife did not immediately respond to requests for comment.
Yuan was the company’s largest shareholder with a 15% stake in the company’s value and about 40% of the company’s voting power before last week’s transactions, according to InsiderScore, which analyzes equity transactions. by corporate insiders. The giveaways amounted to about 6% of the company’s outstanding shares, InsiderScore said.
The Covid-19 pandemic made Zoom’s video conferencing service a household name and the company an investor favorite. The company’s success placed the 51-year-old businessman on Forbes magazine’s list of billionaires, and he was named Entrepreneur of the Year by Time magazine in December.
Zoom’s stock price, which rose from less than $ 100 in early 2020 to more than $ 500 in late 2020, closed around $ 337 on Friday. The stock fell about 8% in Monday afternoon trading. The San Jose, California company has a market valuation of about $ 100 billion.
Born in China, Mr. Yuan worked as an engineer at Cisco Systems Inc.
before leaving to start Zoom in 2011. He made it public in an eye-catching IPO in 2019 and, like other tech founders, maintained outsized control with supervoting actions.
Two trusts bearing the names of Mr. Yuan and his wife, and of which the couple is a co-trustee, delivered about 18 million shares to unspecified recipients on March 3, according to the securities filing. The trusts held the shares as Class B shares, which get 10 votes each, which could be converted to Class A shares, which have only one vote.
“He turned Class B into Class A to do this, so it has a huge impact on his voting power,” said Ben Silverman, research director at InsiderScore. After the transactions, the CEO’s voting power appears to have declined to just under 27%, InsiderScore estimated.
After reporting the results last week, Zoom executives said they expected strong growth to continue this year even as closures were reduced and vaccines were launched worldwide. The company said this year’s revenue would rise more than 41% after quadrupling to $ 2.65 billion in the fiscal year ending in January.
“The future is here with the rise of remote change and work from anywhere. We recognize this new reality, ”Mr. Yuan said on an earnings call.
—Jim Oberman contributed to this article.
Write to Theo Francis at [email protected]
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It appeared in the March 9, 2021 print edition as ‘Zoom CEO transfers 40% stake.’