Spruce Point goes long Zoom, says board open to enhancing value

Spruce Point Management announces a long position in Zoom Communications (ZM), saying it sees “material upside potential” in the shares. Zoom’s valuation is at “egregiously low levels,” particularly considering its estimated $1.2B stake in Anthropic, Spruce Point contends in a report posted on its website. “Beyond failing to find credible evidence to support the bear thesis, we have identified a broad set of recommendations for Zoom’s management and Board that we believe can drive a stock re-rating and significant share upside. Based on our research, we also believe management is open to our suggestions and will carefully consider our recommendations which we have shared with the Board,” the firm adds. Spruce believes Zoom should improve capital allocation, reduce operating expenses, restructure the international business, lobby for S&P 500 inclusion, and pursue a sale of the company. Zoom in premarket trading is up 3% to $93.00.