Zoom And Pinterest Storm Out The Gate As Newly Public Companies

After pricing last night, both Zoom and Pinterest are doing well on the public markets.1

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In the wake of Lyft’s strong pricing run but slack post-IPO performance, there was doubt about how well the two, newly-public unicorns would perform. The answer, it turns out, is quite well.

As we discussed this morning, Zoom and Pinterest are different companies with different target audiences and different growth paths. However, they both look solid in terms of day-one results. As of the time of writing here’s where they stand:

Zoom:

Priced at $36
Opened at $65
Currently trading at $63.85, up around 77 percent.

Pinterest:

Priced at $19
Opened $23.75
Currently trading at $24.73, up around 31 percent

We will update this piece at end-of-day with final figures for both company’s initial performance.

So What?

Very briefly, there are a few takeaways from the strong results of both companies. In honor of time I’ll give us just a single paragraph on each: First, Pinterest shedding negativity. Second, Zoom’s sky-high revenue multiple. Third, the demand implication.

Pinterest’s valuation ($10.1 billion, or over $12 billion on a fully-diluted basis) and that figure’s modest decline from the unicorn’s final private price (when compared to the non-diluted IPO valuation figure) is now moot. The famous social company raised lots of new money and the public markets quickly pushed its new price tag higher than its old value. Pinterest is richer than it has ever been, and is worth more than it has ever been (provided that I am doing the sums correctly). This discounts the argument that the company’s positive culture was too polite to succeed.

Zoom is now worth so much per-dollar of revenue that I don’t understand really what folks are expecting. The company’s $9.2 billion IPO-price valuation gave it a trailing revenue multiple of 27.8x. We don’t know Zoom’s new valuation, precisely (we will in short order, financial websites take time to shake the data loose), but given how far its shares have risen we can surmise that the company’s new revenue multiple is north of 45x. Investors are betting that Zoom can keep growing at 100 percent or more for a long, long time.

Finally, demand for both IPOs looks healthy both in terms of their IPO process and their early trading session. For other unicorns debating going public, the results must be enervating. And that bodes well for more offerings this year.

Next up, Uber.

Illustration: Li-Anne Dias.