As part of the Zoom bonus terms, the stock vests over two years in two chunks, so employees had to have stayed through this past June to get the first half of the 450 shares, and will need to remain with Zoom until Jfor the second half. Unlike options, which give employees a right to buy stock for a lower stock price, RSUs convert to shares whenever certain conditions are met. In the U.S., Zoom gave out 450 RSUs, or restricted stock units, to employees.
And with the ballooning stock price, the retention award bonus has swelled too. Its stock price reached a peak of around $568 in October 2020 before settling around $380 for the last few weeks. If the story at Zoom over the next few years is sluggish growth and profits under pressure, further declines could be on their way for the pandemic darling.But Zoom's stock has been on a tear as the videoconferencing company saw tremendous growth in 2020 and became a household name during the pandemic. And second, valuations in general are coming down as inflation and interest rates rise. First, Zoom is having to ramp up spending just to eke out double-digit growth this year. That's not high compared to the nosebleed valuations software stocks have been awarded in recent years, but two things have changed. Zoom is valued around $31 billion, or roughly 7 times its revenue guidance for fiscal 2023. The problem for Zoom is that its valuation is still not all that attractive relative to this growth opportunity.
It might take a while for the late-pandemic hangover to run its course for Zoom, but the videoconferencing market will almost certainly grow in the long run as remote and hybrid work becomes more accepted as the norm. While these initiatives have long-term potential, it will be tough for Zoom to not be viewed as a one-trick pony by the market. The company launched its own contact center platform in February after its deal to acquire Five9 fell through, and it's been adding collaboration features like Zoom Whiteboard to its product offerings.
Zoom is attempting to diversify its way out of this mess.
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