Semler Chair Recommends Bitcoin Strategy for Zoom to Boost Stock Value
Zoom Video Communications is facing stagnant growth despite having $7.7 billion in cash. Eric Semler, Chair of Semler Scientific, has suggested that Zoom adopt a Bitcoin treasury strategy to enhance its stock value and attract investors.
The Zoom Struggle in the Stock Market
- Zoom's stock surged during the COVID-19 pandemic but has since struggled, facing fierce competition.
- Shares have declined by approximately 40% over the past three years, underperforming the S&P 500 by about 73%.
- Zoom remains profitable with a 40% EBITDA margin and generated $458 million last quarter.
- Despite a forward earnings multiple of 15x, the company's valuation is low due to slow revenue growth and lack of a clear plan.
- Nearly one-third of Zoom's $25 billion market cap is held in cash, prompting calls for a strategic move.
Bitcoin Could Change Everything for Zoom
- Semler believes investing in Bitcoin could revitalize Zoom. Semler Scientific recently purchased 871 Bitcoin for $88.5 million, increasing its total to 3,192 BTC.
- Zoom generates $2 billion in yearly cash flow and has access to affordable loans, making it viable to hold Bitcoin.
- CEO Eric Yuan has not publicly commented on Bitcoin, leaving his stance unclear.
Other companies like Strategy (formerly MicroStrategy) and Tesla have invested in Bitcoin for financial growth and inflation protection. Recent reports indicate that Strategy's stock has outperformed the broader market due to its Bitcoin investments.