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Eric Yuan, founder of Zoom Video Communications Inc., transferred about 40% of his ownership in the company he runs, a stake of about $ 6 billion, after Zoom’s shares more than tripled last year.
The transaction was recorded as two gifts of nearly 9 million shares to unspecified recipients and from two trusts for which Mr. Yuan and his wife are co-trustees, according to a security statement made late Friday.
In a statement, a Zoom spokesman said: “The distributions were made in accordance with the provisions of Eric Yuan and his wife’s trusts, and are consistent with the typical estate planning practices of the Yuans.” The company did not say who now controls the shares. Mr. Yuan and his wife did not immediately respond to requests for comment.
ZOOM GOES TO BOOM!
Mr. Yuan was the company’s largest shareholder with a 15% stake in the company’s value and about 40% of the company’s voting power before last week’s transactions, according to InsiderScore, which analyzes stock transactions by corporate insiders. The gifts accounted for about 6% of the company’s outstanding shares, InsiderScore said.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| ZM | ZOOM VIDEO COMMUNICATIONS, INC. | 310,93 | -26.50 | -7.85% |
ZOOM STAYS CORONAVIRUS PANDEMIC FIXTURE
The Covid-19 pandemic has made Zoom’s video conferencing service a household name and the company an investor. The company’s success landed the 51-year-old entrepreneur on the Forbes magazine list of billionaires and he was named Business Person of the Year in December.
The share price of Zoom, which rose from under $ 100 to $ 500 in early 2020, closed around $ 337 on Friday. The stock traded around 8% on Monday afternoon. The San Jose, California, has a market valuation of about $ 100 billion.
Mr. Yuan was born in China and worked as an engineer at Cisco Systems Inc. worked before joining Zoom in 2011. He announced it in 2019 in a flashy wallet, and like some other technical founders, he held extraordinary control with shares.
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Two trusts with the names of mr. Yuan and his wife – and for whom the couple are co-trustees – gave about 18 million shares to unspecified recipients on March 3, according to the filing of securities. The trusts held the shares as Class B shares, which receive 10 votes each, which can be converted into Class A shares, which have a single vote.
“He converted Class B to Class A to do that, which greatly affects his voting power,” said Ben Silverman, director of InsiderScore. After the transactions, the CEO’s voting power apparently decreased to just 27%, InsiderScore estimated.
After reporting the results last week, Zoom executives said they expect strong growth to continue this year, even as the closure is eased and vaccines expanded around the world. The company said revenue would rise more than 41% this year after more than quadrupling to $ 2.65 billion in the fiscal year ending January.
‘The future is here with the rise of remote and work from anywhere. We recognize this new reality, ‘said Mr. Yuan said in a call.