Tech

Salesforce dumps Zoom shares after more than tripling its money since 2019 IPO

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Key Points
  • Salesforce bought Zoom shares in its IPO last year and held them as the stock rallied.
  • The only equity stake Salesforce had at the end of the second quarter was SurveyMonkey, though it's a small fraction of its original holdings.
Marc Benioff, Co-CEO of SalesForce speaking at the WEF in Davos, Switzerland on Jan. 22, 2019.
Adam Galica | CNBC

Salesforce more than tripled its money on Zoom, after investing $100 million in the video-calling software vendor's IPO last year. 

According to a regulatory filing published on Monday, Salesforce sold all of its 2.8 million Zoom shares in the second quarter. Through its venture arm, Salesforce has invested in numerous cloud software companies in recent years, though its only remaining public holding is in SurveyMonkey, according to the filing.

Zoom went public at $36 a share in April 2019. The stock rocketed out of the gate and has continued rallying ever since, jumping 267% this year as the coronavirus pandemic has led to surging demand for Zoom's software from employees, students and families who are stuck at home. The S&P 500 is up just 4% this year.

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It's not clear from Monday's filing when in the second quarter Salesforce exited its position in Zoom. During the quarter, Zoom's lowest closing price, on April 7, was $113.75 per share, which would translate into a 216% increase. Its highest close, on June 25, was $259.51 per share, which would indicate 620% growth. The return should be reflected in Salesforce's upcoming earnings report.

Salesforce has invested in other software companies as they were debuting on public markets, including Dropbox and SurveyMonkey. It's also invested in many emerging software companies well before they went public and held onto the shares after the IPO.

As recently as a year ago, Salesforce owned stakes in Dropbox, Lyft, SurveyMonkey, Twilio and Zoom. It still retained about 11% of its shares of survey software company SurveyMonkey at the end of the second quarter, but that's only the holding listed.

In addition to selling out of Zoom, Salesforce unloaded its 2.2 million remaining shares of Dropbox in the quarter. Closing prices during the second quarter ranged from $17.70 per share to $23.65 per share, suggesting that Salesforce gained as much as 12.6% on its Dropbox investment from the company's 2018 IPO, underperforming the broader market over that stretch.

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