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Some reports say the whole video conferencing market, being very optimistic, will reach $50B in 2026 (considering Covid-19 - https://www.gminsights.com/industry

Some reports say the whole video conferencing market, being very optimistic, will reach $50B in 2026 (considering Covid-19 - https://www.gminsights.com/industry-analysis/video-conferencing-market https://www.gminsights.com/industry-analysis/video-conferenc...) But Zoom, alone, already has a marketcap of $117.534B (https://finance.yahoo.com/quote/ZM/ https://finance.yahoo.com/quote/ZM/) I really think there is an unsustainable distortion happening.

clusterfish 6y ago
Wild optimism aside, you can sell one or even a thousand ZM shares at approximately the current market price, but you can't sell the entirety of the company at the same price. The pool of buyers is much smaller for such volumes.
newh90 6y ago
I don't really think so. I think we are just moving away from inefficient meetings that are IRL. I would love to see all meetings go remote for many reasons. I think this will stay even once Covid is gone.
user5994461 6y ago
The market being $50B means there are $50B of sales to do per year. Market cap is a multiplier of revenues, easily 10 or 20 for a tech company, that means a $1T market cap to be taken across the videoconference companies. Wondering how numbers can be so high? Count $10 per month * 12 months in a year * 100 million employees in the US... that is $12B per year going to video software!
- vitus 6y ago
  Actually, price / earnings (P/E ratio) is typically 10-20 for _any_ company in the S&P 500. When you look at big tech, the numbers are drastically higher: - AMZN: 92 - GOOG: 34 - FB: 33 - NFLX: 76 - AAPL: 35 - MSFT: 35 Compare this to, say, 3M, at 19, or GM with 17. edit: incidentally, apparently Zoom's P/E is... 527, which is grossly inflated even for a tech company. Tesla is also in the same category with a P/E of 834.
  - A4ET8a8uTh0 6y ago
    It is, but markets can stay irrational longer than you can stay liquid to paraphrase somewhat famous quip. I was also one of those people who tried shorting TSLA since I believe they are way overvalued. I agree with you, but the market has spoken.
  - chasebank 6y ago
    P/E ratio formula is listed above correctly, however, earnings is earnings per share, not revenue. So the parent's market valuation rationale is whacky. Side note - Go read about Japan's lost decade and you'll see how dangerously close our (US) current speculative investing environment is to theirs before it fell.
- Spooky23 6y ago
  Market cap is the paper value of the company. It has little to do with the market. Zoom’s planned pivot is into boring markets like business VoIP. Zoom went bananas because they won the space at a point in time that mattered. FaceTime is too proprietary and lacks features due to E2E, WebEx is run by incompetents, Google Meet is hard to use, and Teams is too complex. There’s a thousand other competitors with a few users. Speculators poured billions into the consort and the valuation went nuts. That could go away in a week.
amelius 6y ago
> I really think there is an unsustainable distortion happening. Yes, soon any website can have their own videoconferencing using web technology like WebRTC. And implementation will be as simple as running "npm install". > But Zoom, alone, already has a marketcap of $117.534B Yes. Zoom having a market cap that's more than half of Intel? Come on now ...
- BlueTemplar 6y ago
  I'll take one good native app over a thousand of crappy websites.

clusterfish 6y ago

Wild optimism aside, you can sell one or even a thousand ZM shares at approximately the current market price, but you can't sell the entirety of the company at the same price. The pool of buyers is much smaller for such volumes.

newh90 6y ago

I don't really think so. I think we are just moving away from inefficient meetings that are IRL. I would love to see all meetings go remote for many reasons. I think this will stay even once Covid is gone.

user5994461 6y ago

The market being $50B means there are $50B of sales to do per year. Market cap is a multiplier of revenues, easily 10 or 20 for a tech company, that means a $1T market cap to be taken across the videoconference companies. Wondering how numbers can be so high? Count $10 per month * 12 months in a year * 100 million employees in the US... that is $12B per year going to video software!

vitus 6y ago
Actually, price / earnings (P/E ratio) is typically 10-20 for _any_ company in the S&P 500. When you look at big tech, the numbers are drastically higher: - AMZN: 92 - GOOG: 34 - FB: 33 - NFLX: 76 - AAPL: 35 - MSFT: 35 Compare this to, say, 3M, at 19, or GM with 17. edit: incidentally, apparently Zoom's P/E is... 527, which is grossly inflated even for a tech company. Tesla is also in the same category with a P/E of 834.
- A4ET8a8uTh0 6y ago
  It is, but markets can stay irrational longer than you can stay liquid to paraphrase somewhat famous quip. I was also one of those people who tried shorting TSLA since I believe they are way overvalued. I agree with you, but the market has spoken.
- chasebank 6y ago
  P/E ratio formula is listed above correctly, however, earnings is earnings per share, not revenue. So the parent's market valuation rationale is whacky. Side note - Go read about Japan's lost decade and you'll see how dangerously close our (US) current speculative investing environment is to theirs before it fell.
Spooky23 6y ago
Market cap is the paper value of the company. It has little to do with the market. Zoom’s planned pivot is into boring markets like business VoIP. Zoom went bananas because they won the space at a point in time that mattered. FaceTime is too proprietary and lacks features due to E2E, WebEx is run by incompetents, Google Meet is hard to use, and Teams is too complex. There’s a thousand other competitors with a few users. Speculators poured billions into the consort and the valuation went nuts. That could go away in a week.

amelius 6y ago

> I really think there is an unsustainable distortion happening. Yes, soon any website can have their own videoconferencing using web technology like WebRTC. And implementation will be as simple as running "npm install". > But Zoom, alone, already has a marketcap of $117.534B Yes. Zoom having a market cap that's more than half of Intel? Come on now ...

BlueTemplar 6y ago
I'll take one good native app over a thousand of crappy websites.