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Zoom trading at ~1,700 P/E which to me seems absurd. Wonder if the acquisition involved much stock! Seems like a good time for Zoom to make transactions like
by TomGullen 6y ago
Zoom trading at ~1,700 P/E which to me seems absurd. Wonder if the acquisition involved much stock! Seems like a good time for Zoom to make transactions like this.
- davedx 6y agoCan you explain this in a little more detail please? Would love to understand more.
- deleted 6y ago[deleted]
- dpflan 6y agoSounds like: stock price is high so use its value to its full extent while the price is high and more valuable. Allows selling/granting of fewer shares of stock too.
- durkie 6y agoI think the thought GP was expressing was that it would be a good time for Zoom to make an acquisition of Keybase paid for in Zoom stock since Zoom stock is trading at a very high multiple of Zoom's earnings. Some people would regard this stock price as unsustainable compared to historic/similar earnings multiples, and that the stock will likely decrease in value in the "near" future. So from Zoom's perspective they may as well buy as much as they can while their Zoombucks are worth a lot since they'd be parting with fewer shares now than if they made the transaction later on.
- m3kw9 6y agoPE is price to earning, but if you look at earnings when is very low(barely making a profit), the number will be very high. So people tend to project the Earnings a year or so, and it would fall drastically.