Zoom Video Communications, once a pandemic-era tech darling, is under growing pressure to rethink its financial strategy. With a $7.7 billion cash reserve but declining stock performance, one prominent executive believes Bitcoin (BTC) could be the answer.
Eric Semler’s Case for Bitcoin
Eric Semler, head of Semler Scientific, has suggested that Zoom could significantly strengthen its position by investing in Bitcoin. He argues that, despite Zoom’s strong $458 million cash flow last quarter, its stock has fallen 40% in three years, underperforming the S&P 500 by 73%.
Semler’s own company, Semler Scientific, has acquired 3,192 BTC, including a recent purchase of 871 BTC for $88.5 million. The company’s stock has doubled in value over the past year, partially due to this strategy.
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Could Zoom Become a Major Corporate Bitcoin Holder?
With $2 billion in annual cash flow, Zoom has the financial strength to become one of the largest corporate Bitcoin holders overnight. Companies like Tesla and MicroStrategy have successfully integrated Bitcoin into their balance sheets, setting a precedent for corporate treasury diversification.
However, Zoom’s founder and CEO, Eric Yuan, has remained silent on Bitcoin, unlike industry giants who have embraced crypto as a hedge against inflation.
Financial Paradox: Strong Profits but Sluggish Growth
Despite a 40% EBITDA margin and a modest 15x forward earnings multiple, Zoom’s stock is stagnant. The company holds one-third of its $25 billion market cap in cash, a strategy some investors see as too conservative in a rapidly evolving digital economy.
Will Zoom Follow Tesla and MicroStrategy?
The decision rests with Eric Yuan, whose unique voting shares give him significant control over Zoom’s future. If he embraces Bitcoin, it could mark a radical shift in corporate treasury management and signal a new wave of institutional adoption.
Investors are watching closely to see whether Zoom takes the crypto leap or continues with its traditional cash strategy.
