Insights

Why Zoom Stock Was a Winner on Wednesday

What happened

Zoom Video Communications (NASDAQ: ZM) stock had a good Wednesday. On a down day for the wider equity market, the video conferencing bellwether’s shares rose by almost 1.2%, thanks mainly to the announcement of a new product from the company.

So what

That morning, Zoom rolled out its new Zoom One suite of subscription services. These bundle a host of the video conferencing company’s offerings, including chat, whiteboard functionalities, and transcription services. They are available in six tiers, which in order of minimal to maximal feature set are Basic, Pro, Business, Business Plus, Enterprise, and Enterprise Plus.

The first four range in price from free (Basic, which includes 40-minute Zoom meetings for a maximum of 100 participants, in addition to the chat, whiteboard, and transcription services) to an annual $250 per user for Business Plus. All four can be purchased directly from Zoom through its web portal. Zoom does not list the prices for the two Enterprise packages. Instead, it urges interested parties to contact its sales department.

“By bringing together chat, phone, meetings, whiteboard, and more in a single offering, we are able to offer our customers solutions that are simple to manage, so they can focus on business issues that matter most,” Zoom quoted its president Greg Tomb as saying.

Now what

The idea to bundle modern business communications essentials like video conferencing and chat is such a no-brainer, we can perhaps wonder a bit why Zoom didn’t conceive and implement something like this years ago.

Nevertheless, although the company didn’t provide any estimates for how much revenue it might draw from Zoom One subscriptions, these offerings are sure to draw at least some interest from businesses of every size. It remains to be seen how good a job Zoom can do of selling the premium packages to them.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

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