I looked into Zoom, as the earnings are coming next week. A few things to note:
1. Its stake in Anthropic was valued at $1.3b in Q1, will increase to \~$3b in Q2 (based on the last funding round), but based on the IPO (assuming $1.7T), it should be closer to $6b.
Both in Q2 and in Q3, there will be huge gains coming from their Anthropic stake.
2. Its market cap is $31.5b, and 45% of it has nothing to do with the underlying business:
\- $0.9b in cash
\- $6.8b in marketable securities
\- $6.4b in investments (including Anthropic, assuming a $1.7b IPO)
**Zoom's underlying business is priced at $17.4b**.
If I treat share-based compensation as a cash expense, its free cash flow is above $1.1b (and growing).
The decision to invest in Anthropic was incredible. I am curious what the next steps will be. I would not be surprised if they sell after the IPO and use the funds to acquire other companies, buy back shares (depending on price), or just return the cash to the shareholders via dividends.
Post: [https://thefinancecorner.substack.com/p/half-of-zoom-has-nothing-to-do-with](https://thefinancecorner.substack.com/p/half-of-zoom-has-nothing-to-do-with)
Video: [https://youtu.be/284ZXwauNmI](https://youtu.be/284ZXwauNmI)
