Zoom Video Communications sent a signal it may be planning a sizable acquisition. The corporate star of the pandemic era is raising $1.5 billion in stock, cashing in on the incredible run-up in its stock over the past year. In case you’ve forgotten, the videoconferencing company’s stock started last year trading at $68 and reached a high in October of $568, although lately it has traded at around $340.
It’s relatively uncommon for tech firms to undertake secondary stock offerings once they’re public, even when they need the money. Companies don’t like diluting existing shareholders by issuing new stock. So they more often sell bonds or convertible notes if they want to raise money, as Docusign, Box and Crowdstrike are doing this week. Tesla is one exception. It has repeatedly raised capital by selling shares in the past few months.