Investors always choose to buy tech companies with definite growth and profitability above anything else. This is what happened when Zoom, a video conferencing company, and Pinterest, a social media site, went on public markets and instantly rallied from the prices of their IPO.
Zoom dominated the trade closing at $15.9 billion and overtook Pinterest’s market capitalization which closed at around $13 billion. The surprising outcome occurred despite the size of Zoom being less than half of the size of Pinterest, according to the current full year of sales.
Zoom’s reported income was $330.5 million, while Pinterest generated $755.9 million in sales. The social media site is earning from ads while the other one sells video conferencing software to businesses, which includes 344 that spend over a hundred million annually.
Pinterest is a well-known brand with 265 million active users every month who are posting and browsing for recipes and various photos. Zoom, on the other hand, is one of the fastest growing companies with 118 percent increased sale during the last two fiscal years. Pinterest only grew 60 percent during that time.
Although Zoom is a smaller company, it has recorded a $7.6 million net income, while Pinterest got a $63 million net loss.
Roger McNamee, the co-founder of investment firm Elevation Partners, says, “Zoom is that most unusual beast, which is a profitable IPO coming out of the tech sector.” “From a stock market point of view, that’s the one I find really compelling,” he added.
Moreover, Zoom has also generated money faster than Pinterest, as well as some of the well-known start-ups like Lyft, Slack, and Uber. As a private company, Zoom has made $160 million, and Pinterest generated around $1.5 billion, according to a report.
The founder, Eric Yuan keeps the Zoom ownership at 20 percent of the company. On the other hand, Ben Silbermann, Pinterest CEO and co-founder, owns 11 percent of the company.