This is complete nonsense. He sold about $23m worth of stock [1], while he owned about 22% of stock at the time of IPO, worth roughly ~$10b in total.<p>[1] <a href="https://www.gurufocus.com/news/1135874/zoom-video-communications-inc-zm-ceo-eric-s-yuan-sold-231-million-of-shares" rel="nofollow">https://www.gurufocus.com/news/1135874/zoom-video-communicat...</a>
This is a ludicrous headline. The CEO converted a tiny percentage of his class B shares to class A in order to sell them. There is nothing noteworthy here.
You cant really blame him.<p>Zoom is currently valued at around 60 times its annual recurring revenues. Their share price has tripled since January.<p>The whole crisis was a fantastic opportunity for them, but it also means that it is going to become critical for microsoft, google and all to offer a competitive product sooner rather than later, considering how many companies are going remote.<p>The competitive advantage of zoom is real, but how long can it last if that becomes a priority for these players. I am not saying that zoom is going to become worthless any time soon but that it's going to be very high to maintain that kind of multiple for a long period of time, especially after covid times.
ZM has two classes of Common Stock - Class A & Class B.<p>Looks like Eric exited his Class A shares but he still holds over $4B+ USD in Class B.<p>source: <a href="https://docoh.com/company/1773298/yuan-eric-s/insider-ownership-history" rel="nofollow">https://docoh.com/company/1773298/yuan-eric-s/insider-owners...</a>
How do you interpret this? The first row he acquired 70,143 at a cost of $0, and the amount he owns after that is 70,143? So he didn't have any before the 11th? Then he sells them all for $LOTS, and then acquires another 70,143 at a cost of $0, and sells them all again? Is this just him cashing out a bonus paid in class A when his actual holdings (assuming he held any before the 11th) are in some other class?
It looks like this is part of a normal "exercise and sell all your options as soon as you receive them" plan. Notice that on 5/11, he goes from 70,143 shares to 0 over the course of the day. And then again on 5/12, he goes from 70,143 shares to 0 over the course of the day. It wouldn't have gone back up to 70,143 the next day if he'd just sold his lump sum of founder shares.
Maybe he wanted a boat. Or a moat. Or maybe he wanted to buy some distressed assets. Or thought now is the right time to setup a trust for his loved ones.<p>Point being, people sell for so many reasons but they only buy for one reason: they think it will make them money.<p>It’s interesting when insiders buy big. Selling has too much noise.
Could be something ominous (though that seems like it would be blatant insider trading). Or, perhaps the CEO thinks that the stock has peaked for the near future. Given Zoom's popularity right now, that seems like a real possibility.
Perhaps this isn’t the best thing for the company, but personally, I can’t imagine having even ten million dollars in stocks (what seems to be the value of the stocks sold per my calculation) and wanting to just keep them there, especially in a single stock. Sell it all, and donate all but three or four million. That’s more enough money to live the rest of your life in a very comfortable way. What’s the point of having more? It’s just a rat race to show off to the people around you.<p>That said, he’s already a billionaire, so it’s not like this is actually a significant change in value for him.