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Zoom (ZM) drags 7% lower as Microsoft (MSFT) cuts Teams cost

By William Hoffman

21:11, 1 December 2021

Zoom call on computer screen
Zoom shares trade lower on Wednesday - Photo: Zoom

Shares in Zoom Video Communications were down as much as 7% on Wednesday after rival Microsoft introduced a new low-cost tier of its Teams communication service for small businesses that undercuts what Zoom offers.

Microsoft announced plans to sell its Teams work messaging communication service as a stand-alone product on Wednesday, rather than software that can only be purchased as part of the larger Office 365 bundle.

At $4 per person per month, “Teams Essentials” comes in below Zoom’s “pro” offering at $14.99 or its “small business” plan at $19.99 per license per month. Both companies also have a free tier.

“We know how difficult the past 20 months have been for small businesses. They’ve had to demonstrate extreme flexibility to adapt, often with limited access to tools and technology,” Jared Spataro, corporate vice president of Modern Work at Microsoft, said in a press release. “Teams Essentials is built specifically to meet the unique needs of small businesses, enabling them to thrive in this new era of work.”

Lower costs

With Teams Essentials, small businesses can get group meetings for up to 30 hours, meetings with up to 300 people and 10GB of cloud storage per user.

ALT

6.49 Price
-1.530% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.04

TSLA

243.74 Price
+0.430% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.22

COIN

147.43 Price
+8.350% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.54

NVDA

475.08 Price
+2.100% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.14

For $16 more, Zoom’s small business plan provides the same 30 hours of group meetings, the same 300 participant limit on calls and but only 1GB of cloud storage. Also, Zoom does not have the same chat function that rival apps Teams and Slack have.

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Stock prices

Zoom shares closed at $197.7 per share, down 6.48% off the prior day’s close. Year to date, the shares are down 45% as it comes off the high it reached during the peak of the pandemic when consumers were stuck inside Zooming with relatives and friends.

Microsoft shares were up as much as 2.6% during intraday trading but closed the day at $330.08 per share for a 0.15% loss in the final minutes of trading.

Read more: Zoom (ZM) plunges amid continued earnings fallout

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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