palacebas.blogg.se

Thus, there are some significant margin headwinds on the horizon. Meanwhile, Zoom has clearly under-spent on privacy and security. Higher free demands means higher hosting and bandwidth costs, without a corresponding uptick in revenue. Despite the recent demand surge, this pathway towards huge profit growth has become less clear over the past few weeks. On the second point, Zoom is one of many video conferencing solutions in the market. Demand for video conferencing software will fall off. Thus, once the coronavirus pandemic fades, consumers, organizations and enterprises will return to doing things in-person. And most businessmen like to conduct in-person meetings. Most teachers like to teach with students in the classroom. Most consumers like to physically hangout with friends. On the first point, humans like physical experiences. Zooming out, bulls will argue that video conferencing and virtualization tailwinds are so strong, that Zoom will breeze past all headwinds and continue to report rocket-ship like growth. That might not scare away consumers who are using the platform to chat with friends. Thus, over the next few months when demand for video conferencing software is highest, Zoom will be in market with a product that has significant privacy and security flaws. They are currently in the process of solving these issues.

Management acknowledges that they have taken missteps surrounding privacy and security.

Meanwhile, the entire country of Taiwan has barred all official use of Zoom. Zoom has been whacked by a series of privacy and safety concerns over the past month, the sum of which are credible enough to force major institutions, organizations and governments to drop and even ban the use of Zoom. In other words, in an attempt to accommodate robust free demand growth, the company compromised the quality of its service for paying customers.

Emails to Zoom to find out why went unanswered, he said, and when he tried to ask customer service through a live chat service he gave up with almost people in the queue already. From a Wall Street Journal piece, which tackles this decline in customer service. In so doing, the company has apparently allocated resources away from things such as paid customer service. Amid a surge in free demand, Zoom has had to allocate significant resources to accommodating that free demand. The big number Zoom bulls have been quoting over the past few weeks is the huge uptick in daily active users of Zoom from 10 million at the end of, to million in March. As such, I think the stock actually has tremendous downside potential from current levels. Zoom stock is NOT a buy at current levels. The answer to the second question is not. All this hype has attracted a lot of retail investor attention. Charles St, Baltimore, MD Shares have since come crashing down on a plethora of privacy, safety and customer support issues.