Eric Semler urges Zoom to adopt a Bitcoin treasury strategy

Eric Semler, Chair of Semler Scientific, has called on Zoom Communications to allocate its $7.7 billion cash reserves to Bitcoin, arguing it could drive growth and shareholder value. 

According to an X post, Semler cited his firm’s success with a similar strategy, accumulating 3,192 BTC valued at $305 million, which helped double its stock price since last year.

Semler labeled Zoom a “Zombie Zone” company, pointing to its underwhelming market performance. Over the last three years, Zoom’s shares have dropped roughly 40%, underperforming the S&P 500 by approximately 73%. 

In the last five years, Zoom has lagged the S&P by about 84%. Despite a forward earnings multiple of 15x and forward EBITDA multiple of 9x, Semler noted that Zoom’s valuation remains low due to stagnant growth.

Zoom holds $7.7 billion in cash, nearly one-third of its $25 billion market cap, with no clear plan for deployment. The company also maintains strong profitability, with ~40% EBITDA margins and $458 million in cash generated last quarter. 

However, its revenue growth outlook remains weak, with projections in the low single digits.

Semler argued that adopting a Bitcoin treasury strategy could transform Zoom into one of the largest corporate Bitcoin (BTC) holders, leveraging its $2 billion in annualized free cash flow and access to low-cost debt.

He emphasized that Zoom founder and CEO Eric Yuan, who has super-voting shares, holds the power to implement this strategy, even though Yuan has not publicly commented on Bitcoin.