Zoom Video Communications Inc. (ZM)

They invested $50 million in Anthropic in 2023, and is probably worth a billion.

Doesn't follow it. Has competitors from Microsoft and others. Growth rate has been 3-4% given pricing pressure. Too much competition.

Is troubled that it's fallen to $85, back into their range. It was $78.59 right before the report, so watch this level.

They report Monday. He always hoped that Zoom would expand beyond their core service, like buying a company. Maybe next week. He expects a decent quarter.

Their last quarter was pretty good, and they have some good apps. His stepson worked there. They are doing a lot right, but it's taking a very long time.

It went public in 20129, then soared during the pandemic, but tanked 90% from its peak. At that time, anything internet was beloved like the internet bubble of 2000.

Profitable, but just sort of flatlined. You have to gravitate to the big guys, because those are the ones with the muscle and cash to spend, and can turn a profit from AI.

It topped $588 during Covid in October 2020, but competition came charging from Cisco, Microsoft, Google and others. Shares fell to about $75 in two years. There were points on the way down when some investors bought in, assuming shares were a bargain. But every time they bought they got burned. The stock was broken, in free fall.

A lesson is not to buy a damaged company (though buy a damaged stock). Zoom was THE Covid stock, but after the pandemic that success vanished as their competitors caught up to them, their cash position vanished and the company could not pivot to a new reality. Shares fell from $588 to the mid-$70s. Buyers along the way figured that shares could not fall further, but they did and those buyers got burned. The stock went into free fall. How to tell a damaged company from a damaged stock? You never know, so to minimize losses always buy and sell in tranches, not all in one shot.

It reports Monday. Is restructuring through layoffs. If it reports any growth, shares will jump. He hopes so.

A tough call. Great people there, but the business model isn't making enough money. They need a merger.