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Zoom Zoom? Careful...
Insiders Selling Millions
With the move to “work from home” Zoom has been a great benefactor of the current covid-19 situation.
Their growth has been tremendous.
The stock has been on a tear, doubling since December.
The stock currently trades at a Price to Sales multiple of almost 60! That is, for every dollar of revenue they make, the stock costs $60. That said, it’s unclear how much their revenue has accelerated over the past few weeks, so the number may in fact be lower.
But that’s not why I wrote this article.
A Word of Caution...
Insiders are selling.
And selling hard.
Despite the massive uptick in growth, no executives at the company are buying shares.
In fact, all I see is sales throughout Q1, and most of these sales are in the millions!
Of course, there could be many reasons to sell (eg: a home purchase, or to diversify their net worth etc).
I’m not saying that Zoom stock is about to fall. I don’t really have an opinion on whether Zoom is a good investment right now.
All I’m saying is that this is something to keep in mind if you own or plan to buy the stock.