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Reuters

Zoom nearly doubles revenue forecast on remote-work boost, but costs rising

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(Reuters) – Zoom Video Communications Inc (ZM.O) nearly doubled its expectations for annual sales on Tuesday, driven by a surge in users as more people work from home and connect with friends online during coronavirus lockdowns.

FILE PHOTO: Small toy figures are seen in front of diplayed Zoom logo in this illustration taken March 19, 2020. REUTERS/Dado Ruvic/Illustration

But Zoom’s costs also rose sharply, and executives said gross margins would likely remain below Zoom’s historical norms in the coming quarters, sending shares of the San Jose, California-based down 3.5% to $200.75 in after-market trading.

The company has transformed itself into a global video hangout from a business-oriented teleconferencing tool. It came under fire over privacy and security issues, prompting it to roll out major upgrades.

The company raised its full-year revenue forecast to a range of $1.78 billion to $1.80 billion from $905 million to $915 million. Analysts on average expected revenue of $935.2 million for the fiscal year ending January 2021.

The latest quarterly report shows the company now has about 265,400 customers with more than 10 employees, a near fourfold increase from a year earlier.

But there were also possible signs the Zoom boom may be slowing as economies reopen. Chief Financial Officer Kelly Steckelberg said the April peak usage of 300 million daily meeting participants declined slightly in May.

The company expects it to rise eventually above 300 million again.

Zoom company competes with Cisco Systems Inc’s (CSCO.O) Webex, Microsoft Corp (MSFT.O) Teams and Google’s (GOOGL.O) Meet platform for paying customers, particularly enterprises, while offering a free version to consumers.

Zoom reported fiscal first-quarter revenue of $328.2 million, beating analysts’ estimates of $202.7 million, according to IBES data from Refinitiv.

While Zoom’s revenue increased sharply, its costs rose even more steeply. The company’s cost of revenue was up 330% to $103.7 million, which lowered its gross margin to 68.4% from 80.2% a year earlier.

One of Zoom’s biggest costs is data centers and bandwidth to host calls. The company runs some of its own data centers, but also pays for cloud computing services from Amazon.com Inc’s (AMZN.O) Amazon Web Services and Microsoft, and in April added Oracle Corp (ORCL.N) as a vendor.

On a Zoom call with investors, Chief Executive Eric Yuan said Amazon provided the “majority” of new capacity that Zoom needed to meet demand.

Steckelberg said on the call that the company planned to expand its own data centers to become more efficient, which should boost margins to the mid-70% range in the next several quarters. Analysts had expected gross margins to hover between 79% and 81% over the coming year, according to Refinitiv data.

Excluding items, the company earned 20 cents per share in the latest quarter, beating analysts’ estimate of 9 cents.

Zoom’s shares have more than tripled this year.

Reporting by Ayanti Bera in Bengaluru and Stephen Nellis in San Francisco; Editing by Lisa Shumaker, Peter Henderson and Peter Cooney

Source: http://feeds.reuters.com/~r/reuters/topNews/~3/SAC0uzPm5G0/zoom-nearly-doubles-revenue-forecast-on-remote-work-boost-but-costs-rising-idUSKBN2392XF

Blockchain

India to have a ‘window’ for Bitcoin, says minister amid crypto ban FUD

The Ministry of Finance of India continues to form a careful position on private cryptocurrencies.

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The minister of finance of India, Nirmala Sitharaman, has given a ray of hope for the Indian cryptocurrency community as more fear, uncertainty and doubt circulate regarding a supposedly impending ban on digital assets. 

In a Saturday interview with India Today, Sitharaman emphasized that the ministry does not plan to shut off Indian innovations associated with Bitcoin (BTC) and its underlying blockchain technology.

“From our side, we are very clear that we are not shutting all options off. We will allow certain windows for people use, so that experiments on the blockchain, Bitcoins or cryptocurrency […] and fintech, which depend on such experiments, will have that window available for them. We are not going to shut it off,” she said.

Sitharaman said that the ministry is finalizing a cabinet note on crypto as India continues formulating its official stance on the asset class. “It is nearing completion, and then it will be taken to the cabinet. The Supreme Court had commented on cryptocurrency. We are very clear that the Reserve Bank of India will take a call on an official cryptocurrency,” she said.

After India’s supreme court lifted a crypto banking ban one year ago, reports of a new ban started circulating in early 2021. In February, another anonymous Indian official claimed that the government was about to introduce a complete ban on crypto, giving investors up to six months to liquidate their holdings.

On Sunday, Reuters published a report citing an anonymous senior government official who claimed that India is preparing to enforce a blanket ban on crypto and impose major penalties on rule-breakers. As part of an alleged bill, India is planning to criminalize “possession, issuance, mining, trading and transferring crypto-assets,” the source claimed.

Despite reports of a ban from anonymous sources continuing to surface, Sitharaman said in early March that the ministry wants to form a “calibrated” stance on digital assets. 

Nischal Shetty, founder of local crypto exchange WazirX, seemed optimistic about Sitharaman’s comments in a tweet, stating that it is time for the Indian crypto community to build. 

The RBI and the Ministry of Finance did not immediately respond to Cointelegraph’s request for comment.

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Source: https://cointelegraph.com/news/india-to-have-a-window-for-bitcoin-says-minister-amid-crypto-ban-fud

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Reuters

Fintech banker McLaughlin hunts bigger deal after upsized SPAC IPO

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NEW YORK (Reuters) – The blank check firm co-founded by one of the most prominent U.S. financial technology investment bankers will broaden its search for merger partners to companies worth up to $10 billion after pricing a larger initial public offering (IPO).

Steve McLaughlin started FT Partners in 2001 and since then, the fintech-focused investment bank has worked on mergers and acquisitions and public and private fundraising for the likes of BlackRock Inc, StoneCo Ltd and GreenSky Inc.

An alumnus of Goldman Sachs, McLaughlin and FT Partners have also been involved in advising a half-dozen firms in mergers with so-called special purpose acquisition companies (SPACs), most recently mobile bank MoneyLion’s $2.9 billion combination with Fusion Acquisition Corp.

Alongside Gene Yoon, founder of technology-focused investment firm Bregal Sagemount, McLaughlin is now sponsoring his own SPAC. Independence Holdings Corp. priced a $435 million IPO on Monday, having increased the number of units sold due to investor demand.

SPACs are shell companies that raise funds from investors to take a private company public.

Pulling in extra cash and fully exercising the greenshoe, a share allotment potentially sold in the days after an IPO prices, McLaughlin told Reuters on Tuesday, will allow Independence to target larger fintech companies, beyond the $5 billion maximum size previously considered.

He added a deal involving a company that processes payments between businesses, or one providing financial management services, would be likely for Independence.

“We provide an incredibly attractive option for a company as we’ve successfully taken many companies through this complex process, so we can give comfort to founders and investors along the way,” McLaughlin said.

Despite heightened investor interest in cryptocurrencies, McLaughlin said Independence wouldn’t be investing in a firm in that industry because most businesses are still too early in their development.

He added it was highly unlikely that Independence would end up merging with a client of his investment bank.

Source: Reuters – Fintech banker McLaughlin hunts bigger deal after upsized SPAC IPO

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Reuters

Former Disney executives Mayer and Staggs plan new SPAC – source

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(Reuters) – Former Walt Disney Co executives Kevin Mayer and Thomas Staggs plan to raise $300 million in an initial public offering for a new special purpose acquisition company (SPAC), a person familiar with the matter said on Thursday.

The duo’s first SPAC, Forest Road Acquisition Corp, agreed a three-way merger last week with fitness companies Beachbody LLC and Myx Fitness LLC that was valued at around $2.9 billion.

Former basketball star Shaquille O’Neal, who is also on the board of directors at pizza chain Papa John’s International Inc, and Martin Luther King III, the oldest son of civil rights leader Martin Luther King Jr, are working for Forest Road II as a strategic advisor and a director, respectively, the source said.

Mayer and Staggs will serve as co-chief executives and co-chairmen of the new SPAC, the source said. They had worked with the first Forest Road SPAC as a strategic advisor and director, respectively.

The source requested anonymity ahead of a regulatory disclosure on the SPAC IPO.

Mayer was Disney’s top streaming executive before he left the media giant last year to become the chief executive of popular video app TikTok. He departed the company three months after joining. Staggs worked at Disney for 26 years and held various roles including chief operating officer.

SPACs are shell companies that raise funds to take a private company public. They have gained immense popularity since last year, as they allow companies to go public by eschewing traditional IPOs.

A string of high-profile SPACs have been raised in the last 12 months, including by financial investors William Ackman and Barry Sternlicht, former U.S. House Speaker Paul Ryan and ex-NFL quarterback Colin Kaepernick.

Source: Reuters – Former Disney executives Mayer and Staggs plan new SPAC-source

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Reuters

Global firms raise $546 billion in January as SPAC frenzy continues

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(Reuters) – Companies raised $546 billion from new bond and share issues in January, as a flood of central bank money-printing and recovering stock markets brought record numbers of new listings, SPAC deals and share sales, Refinitiv data showed on Wednesday.

The numbers included $106.15 billion in initial public offerings (IPOs), SPACs and secondary offerings, with the amount of money raised by SPACs alone soaring 20 times to $24.26 billion from a year earlier, the data showed.

Companies also raised nearly $439.9 billion in corporate debt in January, a 5% fall since the same period last year, but still the second largest January in 25 years.

A SPAC, a shell company that raises money in an IPO before later merging with a privately held company to take the latter public, has become many investors structure of choice over the past year.

January’s haul was already 30% of a total $79 billion raised by SPACs in the whole of 2020.

Traditional IPO volumes in the United States, however, remained higher than SPACs in January, hitting a 25-year high of $33.9 billion.

Some 47% new bond and share issues were U.S. offerings in January this year, with China second with $23.96 billion.

Nasdaq was the clear winner among exchanges, with 167 issues raising $41.12 billion, followed by the New York Stock Exchange and the Hong Kong Exchange a close third, with both raking in a little more than $18 billion respectively.

That was in stark contrast to European financial hubs London and Frankfurt, which raised $4.29 billion and $1.72 billion respectively.

Chinese online video company Kuaishou Technology is the biggest IPO globally so far this year, raising $5.42 billion in Hong Kong, followed by Polish parcel locker business InPost SA which raised $3.40 billion in Amsterdam.

Source: Reuters – Global firms raise $546 billion in January as SPAC frenzy continues

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