[SAN JOSE] Some of the biggest names in finance and business made a fortune on Zoom Video Communications: Hong Kong's Li Ka-shing, Tiger Global Management's Chase Coleman and, of course, founder Eric Yuan, whose net worth has surged to more than US$10 billion.
And then there's Samuel Chen, a little-known Taiwanese investor who made his initial wealth through ink trading and started putting money in the video-conferencing juggernaut about a decade ago.
His Digital Mobile Venture, which participated in Zoom's early funding rounds, controls a US$1.6 billion stake based on Thursday's closing price, assuming it hasn't sold stock since the holding was last disclosed at the end of March.
Shares of Zoom, which recently reported a 170 per cent increase in first-quarter revenue, have more than quintupled since their initial public offering (IPO) last year.
Mr Chen is also a board member of Taiwan circuit maker Sonix Technology, and Digital Mobile is the biggest shareholder of California-based Telenav, which makes navigation software.
He keeps a low profile and doesn't give interviews. Shumin Huang, a spokesperson for Sonix, said he doesn't engage in that firm's daily operations. With respect to the Zoom investment, he considers himself lucky, Ms Huang said.
For that, Mr Chen can thank Telenav chief executive officer H P Jin, who introduced him to Mr Yuan, according to a person familiar with the relationship. Mr Jin knew Mr Yuan from when they played soccer together on weekends in the San Francisco area, and he invested alongside Mr Chen in Zoom's early financing rounds partly because of how Mr Yuan conducted himself on the pitch.
"The way you behave on the soccer field is very important," said Mr Jin, who estimates his Zoom stake is worth more than US$100 million.
Mr Chen's investment firm has already sold some Zoom shares, including a US$22 million chunk at Zoom's April 2019 IPO and an additional 13 million shares through March, according to a filing. That means it could have earned a windfall of as much as US$2.1 billion.
Analysts tracked by Bloomberg are split on the stock's prospects. A dozen recommend that investors buy the shares, 13 have hold ratings and five say sell. Zoom's surging popularity has come with concerns over its security practices, prompting the company to bolster protective measures for users.
There's also the risk that people will abandon the service after the pandemic ends and they return to the workplace en masse.
The stock slid 3 per cent to US$204.04 at 2.10pm in New York, paring the company's market value to about US$57.5 billion.
"How can anybody be tired of Zoom?" chief financial officer Kelly Steckelberg said Friday in an interview with Bloomberg TV. "Video communication has been integrated into all aspects of our lives. Sure, maybe you don't want to spend all of your days on Zoom meetings, but maybe we will see a mixed approach to that. We also have many other products, Zoom Phone, our cloud-based product as well as Zoom Rooms as people think about going back to work."
Zoom's cloud-based phone offering is a "significant opportunity" that could set it up as a unified communications provider, Alex Zukin, an analyst at RBC Capital Markets, said in a note to clients this week in which he upgraded the shares to a buy.
There's "still money to be made in the stock," he said.
Mr Chen and other investors made initial investments in Zoom in 2011, according to a post last year on Medium by Louis Li of venture-capital firm TSVC, formerly known as TEEC Angel Fund.
A year later, as Zoom burned through its seed funding and few venture-capital funds showed interest, Mr Chen stepped in to lead a Series A round.
The investor, now in his late 60s, left Zoom's board in 2018, four years after Digit Mobile Inc, a Taiwan-based company where he serves as chairman, brought the service to the island.
Mr Chen, who received a bachelor's degree in chemistry from Taiwan's National Tsing Hua University, earned his early fortune through a business trading ink, according to a book on successful former students published to celebrate the college's 100th anniversary.