Five9 Gains as Piper Sees Potential for Higher Bid by Zoom

By Dhirendra Tripathi

Investing.com – Five9 stock (NASDAQ:FIVN) rose 3% Friday as Piper Sandler upgraded the stock to overweight on prospects of Zoom Video (NASDAQ:ZM) offering a higher price to buy the cloud-based customer-service software provider.

At the same time, analyst James Fish cut his target for Five9 by $3 to $200, still almost 16% above the current level of $173. Zoom traded 1.6% higher.

As per the July 18 all-stock offer, Five9 stockholders will receive 0.55 shares of Zoom for each share of the company they hold. This represents a per share price for Five9 stock of $200.28 and values the company at $13.56 billion.

The acquisition is expected to enhance Zoom’s presence with enterprise customers and help the video conferencing service target the $24 billion contact center market.

Five9 is a pioneer of cloud-based contact center software. Its cloud contact center offers applications that allow management of customer interactions across many channels.

The acquisition is complementary to the growing popularity of Zoom's cloud-based phone system that offers a digital alternative to traditional phone systems in offices, Zoom said in its note announcing the offer.

Fish’s report comes after proxy advisory firm Institutional Shareholder Services recommended voting against the Zoom deal.

Though the combined company will have access to a larger market, ISS said, "The all-stock deal exposes Five9 shareholders to a more volatile stock whose growth prospects have become less compelling as society inches towards a post-pandemic environment."

Since the deal was announced, Zoom shares have lost more than 20% of their value, while Five9 has eroded by about 5%.

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