Cathie Wood Buys Zoom’s Dip to Pre-Pandemic Level After Results

(Bloomberg) — Kathy Wood bought shares of Zoom Video Communications Inc as they fell to levels seen before the stock’s meteoric rise during the pandemic.

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Two Arc Investment Management LLC funds bought more than 800,000 shares Tuesday, worth $68.25 million at the day’s close, according to daily trading data from Arc compiled by Bloomberg. That marked Ark’s first purchase of shares of the video-conferencing company in three months.

Zoom posted a 17% drop on the closing price last seen in January 2020 after cutting its annual revenue forecast. Once a major pandemic beneficiary, the firm is struggling to reopen workplaces, and said it was losing sales from consumers and small business faster than anticipated.

The stock is down 56% this year, missing a rally in technology stocks since mid-June. The latest results showed that its transition from an essential COVID-era tool to an enterprise business platform is going to take longer than expected.

Still, some analysts remain optimistic about the stock’s outlook over the next 12 months.

Morgan Stanley analysts, including Meta Marshall, maintained their overweight rating, citing the valuation, the company’s ability to build platforms and opportunities outside the US as reasons for the remaining bullishness.

Arch was the company’s fifth largest shareholder, holding approximately 9.58 million shares as of the end of June, according to data compiled by Bloomberg. It has been largely adding to the platform’s shares since the fourth quarter of 2020. Bloomberg data also indicates that Arc either owns or has options for Zoom.

Arc Investment Management has lost nearly half of its assets under management since December, and its flagship Arc Innovation ETF is set to drop 54% in 2022 amid concerns that global monetary tightening has slashed growth stock valuations. Wood is now closing one of its exchange traded funds for the first time.

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