Merger Arbitrage Mondays – Five9 Investors Betting On An Independent Future

  • September 27, 2021

Zoom Video Communications (ZM) has run into significant challenges when it comes to its first billion dollar acquisition. The company’s acquisition of Five9 (FIVN) presents an interesting situation. When an acquisition runs into hurdles, perceived or real, the spread on the deal normally increases to reflect the increased risk that the deal might not close.

We are seeing the exact opposite with the Five9 acquisition where the spread on the deal was 3.95% the week after the deal was announced and it even eclipsed 5% on August 6, 2021. The first roadblock the deal hit was on August 30, 2021, when the Federal Communications Commission (FCC) said that it won’t allow a “streamlined” review of the transaction and they would have to look deeper into the deal. The FCC was asked to refer the case to the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector for review, to determine whether this application poses a risk to the national security or law enforcement interests of the United States. Under normal circumstances, news like this would have caused the spread on the deal to increase significantly but what we saw was that the spread started going negative shortly after this announcement as you can see from our spread history chart below.

Five9 Spread History Chart
Five9 Spread History Chart (source: InsideArbitrage database)

The second hurdle showed up on September 17, 2021, when proxy advisory firm Institutional Shareholder Services (ISS) recommended a vote by shareholders against Zoom’s deal for Five9, citing growth concerns. We normally do not see ISS recommend that shareholders vote against a deal. It did not help that in its latest earnings report, Zoom mentioned that its business could face potential risks related to Five9’s operations in Russia.

The latest hurdle faced by this deal came on September 21, 2021, when The Wall Street Journal reported that, “A Justice Department-led panel is investigating Zoom Video Communications Inc.’s deal to buy an American customer-service software company, citing potential national-security risks posed by the U.S. videoconferencing giant’s China ties.”

The spread on the deal dropped to -3.02% in the first week of September and continued to decline and is currently at an astounding -12.5%. At its current price Five9 is below where it was trading before the deal with Zoom was announced. This is partially because Zoom has dropped nearly 25% since the deal was announced and since this is an all stock deal, Five9 dropped along with Zoom. However Zoom and Five9’s stock became inversely correlated since the start of September reflecting investor expectations that the deal is unlikely to go through.

Zoom Five9 Stock Correlation
Zoom Five9 Stock Correlation (source: Yahoo Finance)

If you were of the persuasion that Five9 is likely to do well as an independent company and that the deal is unlikely to go through, it might make sense to wait for the deal to fail and pick up Five9 at an attractive price if we see forced selling by arbitrageurs. We saw this recently when Aon’s acquisition of Willis Tower Watson (WLTW) failed and on the third day of forced selling, the stock dipped below $200. WLTW is now trading at $233.83 and recently announced a huge $4 billion buyback accounting for more than 13% of the market cap of the company at the time of announcement.

For more background about the Five9 deal, check out what we wrote in our Merger Arbitrage Mondays post on July 26, 2021 after it was announced:

The acquisition of Five9 (FIVN) by Zoom Video Communications (ZM) was the largest deal announced last week. In the past two years Zoom Video Communications (ZM) has gained momentum during the COVID-19 pandemic as people across the globe started working from home and school continued remotely due to the lockdown. The acquisition of Five9 will enable Zoom to enhance its presence with enterprise customers.

Zoom originally priced its IPO between $28 and $32 before pricing up and going public at $36 in April 2019. The stock closed its first day of trading at $62 implying a price/sales ratio of over 40 times trailing sales. This valuation was too rich for my liking and I decided to stay on the sidelines. Less than a year later the COVID-19 pandemic hit and the stock went parabolic. I did start a position in the early days of the pandemic as the world around us had changed and what had previously looked like very rich valuation seemed less so in this new world of remote work and school.

The stock eventually peaked over $568 this February and then gave back some of those gains in the ensuing months. Trading at $359, the stock is still expensive trading at 31 times trailing sales, 25 times forward sales and a forward P/E of 120. It makes perfect sense that Zoom is using its expensive stock to purchase assets like Five9 that will allow the company to enter adjacent markets. When Twilio (TWLO) acquired SendGrid in a $3 billion deal that almost didn’t happen, the market perceived that deal as indicating that Twilio’s organic growth had peaked and Twilio’s stock dropped after the deal was announced. As an investor in Twilio and a user of both products for several years, the deal made a lot of strategic sense to me and eventually the market warmed up to Twilio again. Zoom did not see its stock drop much in response to this deal either because the market saw the outcome of the Twilio – SendGrid deal or because partial remote work and school appear to be here to stay.

Five9 is a provider of cloud contact center software (“CCaaS”) and it has a $24 billion TAM (total addressable market). Five9’s TAM will join Zoom’s standalone $62B TAM for a cumulative TAM of $86B.

Merger activity declined significantly last week with no new deals announced. Three active deals completed last week. You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) that automatically updates itself during market hours.

There were three new deals announced in the Deals in the Works section last week.

SPAC Arbitrage

There were 6 SPAC IPOs filed and 2 new SPAC business combinations announced last week. You can find the new SPAC IPO announcements in our SPACs tool here.

  1. On September 20, 2021, Tiedemann Group, Alvarium Investments Limited and Cartesian Growth Corporation (GLBL) jointly announced entry into a definitive business combination agreement. This proposed transaction will form Alvarium Tiedemann Holdings, which is expected to be a leading independent, global investment firm providing institutions, entrepreneurs, families and emerging next-generation leaders with fiduciary capabilities as well as investment strategies and services.
  2. On September 21, 2021, Transfix, a leading digital freight platform, announced it has entered into a definitive business combination agreement with G Squared Ascend (GSQD).

Weekly Spread Changes:

The table below shows weekly spread changes between September 17 and September 24, 2021.

SymbolQuoteAcquiring
Company
Acquiring
Company Quote
Current
Spread
Last Week
Spread
Spread Change
Weekly
Deal
Type
CLDB27.16Farmers National Banc Corp. (FMNB)15.43-0.58%-3.98%3.40%All Stock
CIT50.74First Citizens BancShares, Inc. (FCNCA)844.553.20%0.54%2.66%All Stock
CHNG21.37UnitedHealth Group Incorporated (UNH)407.0820.50%17.90%2.60%All Cash
SOLY20.65Allergan Aesthetics (N/A)9.44%7.93%1.51%All Cash
FOE20.36Prince International Corporation (N/A)8.06%6.64%1.42%All Cash
SBBP2.09Xeris Pharmaceuticals, Inc. (XERS)2.49-6.60%-3.85%-2.75%All Stock
BOCH14.81Columbia Banking System, Inc. (COLB)37.080.15%3.12%-2.97%All Stock
FIVN172.25Zoom Video Communications, Inc. (ZM)272.36-12.51%-9.07%-3.44%All Stock
AJRD42.66Lockheed Martin Corporation (LMT)349.5219.55%23.07%-3.52%All Cash
MSON25.86Bioventus Inc. (BVS)14.668.28%12.81%-4.53%Special Conditions

Deal Statistics:

Total Number of Deals Closed in 2021136
Total Number of Deals Not Completed in 202110
Total Number of Pending Deals
Cash Deals49
Stock Deals35
Stock & Cash Deals9
Special Conditions3
Total Number of Pending Deals96
Aggregate Deal Consideration$881.13 billion

Deal Updates:

  1. On September 17, 2021, shareholders of Select Bancorp (SLCTapproved the company’s merger with First Bancorp (FBNC) at a special meeting of shareholders.
  2. On September 17, 2021, shareholders of Tremont Mortgage Trust (TRMTapproved the company’s merger with RMR Mortgage Trust (RMRM) at a special meeting of shareholders.
  3. On September 21, 2021, Columbia Banking System (COLB) and Bank of Commerce Holdings (BOCHjointly announced approval by Bank of Commerce shareholders for their proposed merger, and the receipt of all required regulatory approvals. The mtransaction is expected to be completed on or about October 1, 2021.
  4. On September 21, 2021, Magna International and Veoneer (VNEannounced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or HSR Act, in connection with the previously announced acquisition of Veoneer by Magna.
  5. September 22, 2021: According to Reuters, Zoom Video Communications’s (ZM) proposed deal for Five9 (FIVNmay be delayed by a U.S. Justice Department-led committee review but is unlikely to be scrapped.
  6. On September 23, 2021, Navios Maritime Acquisition Corporation (NNA) announced that the special meeting of stockholders will be held on October 15, 2021.

Closed Deals:

  1. The acquisition of New Senior Investment Group (SNR) by Ventas (VTR) on September 21, 2021. It took 85 days for this deal to be completed.
  2. The acquisition of W. R. Grace & Co. (GRA) by Standard Industries Holdings on September 22, 2021. It took 149 days for this deal to be completed.
  3. The acquisition of Sogou (SOGO) by Tencent Parties on September 23, 2021. It took 359 days for this deal to be completed.

Top 10 deals with largest spreads:

SymbolAnnounced
Date
Acquiring
Company
Closing
Price
Last
Price
Closing
Date
ProfitAnnualized
Profit
TEDU04/30/2021Kidedu Holdings Limited (N/A)$4.00$1.4209/30/2021181.69%16579.23%
MX03/26/2021South Dearborn Limited (N/A)$29.00$17.9712/31/202161.38%233.37%
CHNG01/06/2021UnitedHealth Group Incorporated (UNH)$25.75$21.3712/31/202120.50%77.93%
AJRD12/20/2020Lockheed Martin Corporation (LMT)$51.00$42.6612/31/202119.55%74.33%
XLNX10/27/2020Advanced Micro Devices, Inc. (AMD)$182.34$157.2412/31/202115.96%60.68%
SJR03/15/2021Rogers Communications Inc. (RCI)$32.40$29.0106/30/202211.69%15.40%
JOBS06/21/2021Garnet Faith Limited (N/A)$79.05$71.6412/31/202110.34%39.33%
SOLY05/10/2021Allergan Aesthetics (N/A)$22.60$20.6509/30/20219.44%861.68%
MSON07/29/2021Bioventus Inc. (BVS)$28.00$25.8612/31/20218.28%31.46%
FOE05/11/2021Prince International Corporation (N/A)$22.00$20.3603/31/20228.06%15.81%

List of all pending deals:

The list of all pending deals is only available to InsideArbitrage Premium and Plus members.

TargetAnnounced
Date
AcquirerDeal
Type
Closing
Value
Deal
Price
Last
Price
Target VolumeEstimated
Closing Date
ReturnAnnualized
Return
+TEDU4/30/21Kidedu Holdings Limited (N/A)All Cash$230.6 M$4.00$1.4200384,7169/30/21181.69%22105.63%
+MX3/26/21South Dearborn Limited (N/A)All Cash$1.4 B$29.00$17.97263,32712/31/2161.38%235.83%
+CHNG1/06/21UnitedHealth Group Incorporated (UNH)All Cash$13.28 B$25.75$21.371,096,40512/31/2120.50%78.75%
+AJRD12/20/20Lockheed Martin Corporation (LMT)All Cash$3.79 B$51.00$42.66861,43012/31/2119.55%75.11%
+XLNX10/27/20Advanced Micro Devices, Inc. (AMD)All Stock$33.43 B$182.34$157.241,350,76412/31/2115.96%61.32%
+SJR3/15/21Rogers Communications Inc. (RCI)Special Conditions$26 B$32.40$29.01107,8186/30/2211.69%15.45%
+JOBS6/21/21Garnet Faith Limited (N/A)All Cash$3.63 B$79.05$71.64193,55612/31/2110.34%39.74%
+SOLY5/10/21Allergan Aesthetics (N/A)All Cash$550 M$22.60$20.6563,2579/30/219.44%1148.91%
+MSON7/29/21Bioventus Inc. (BVS)Special Conditions$518 million$28.00$25.8636,41712/31/218.28%31.79%
+FOE5/11/21Prince International Corporation (N/A)All Cash$2.1 B$22.00$20.36281,1013/31/228.06%15.89%
+XONE8/11/21Desktop Metal, Inc. (DM)Special Conditions$418.26 M$25.50$23.62185,64012/31/217.96%30.58%
+COHR3/25/21II-VI Incorporated (IIVI)Cash Plus Stock$6.84 B$275.95$255.98129,06812/31/217.80%29.97%
+SAFM8/09/21Cargill and Continental Grain Company (N/A)All Cash$4.49 B$203.00$188.54247,4231/31/227.67%22.22%
+KDMN9/08/21Sanofi (SNY)All Cash$1.64 B$9.50$8.832,052,74112/31/217.59%29.15%
+MRLN4/19/21HPS Investment Partners LLC (N/A)All Cash$109.4 M$23.50$22.238,0203/31/225.86%11.55%
+NFH8/04/21Unicorn II Holdings Limited (N/A)All Cash$2.09 billion$12.00$11.36364,40012/31/215.63%21.65%
+TRIL8/23/21Pfizer Inc. (PFE)All Cash$1.2 B$18.50$17.53684,19012/31/215.53%21.26%
+XENT8/06/21Medtronic plc (MDT)All Cash$1.1 billion$28.25$27.14206,5043/31/224.09%8.07%
+HRC9/02/21Baxter International Inc. (BAX)All Cash$12.4 B$156.00$150808,0873/31/224.00%7.89%
+GWB9/16/21First Interstate BancSystem, Inc. (FIBK)All Stock$2 B$32.77$31.57561,4643/31/223.81%7.52%
+HBMD7/13/21F.N.B. Corporation (FNB)All Stock$418 M$20.45$19.788,8531/31/223.80%11.00%
+GTS8/24/21GuideWell Mutual Holding Corporation (N/A)All Cash$665.93 M$36.00$34.78303,4796/30/223.51%4.64%
+INFO11/30/20S&P Global (SPGI)All Stock$44 B$128.58$124.571,010,20012/31/213.22%12.38%
+CIT10/16/20First Citizens BancShares, Inc. (FCNCA)All Stock$2.42 B$52.36$50.74487,7509/30/213.20%388.95%
+ATH3/08/21Apollo Global Management, Inc. (APO)All Stock$6.01 B$71.71$69.79438,8901/31/222.75%7.97%
+KSU9/15/21Canadian Pacific Railway Limited (CP)Cash Plus Stock$30.44 B$279.74$272.43520,58212/31/212.68%10.31%
+ITMR9/13/21ZOLL Medical Corporation (N/A)All Cash$399.11 M$31.00$30.2950,94312/31/212.34%9.01%
+ATC7/01/21MKS Instruments, Inc. (MKSI)Cash Plus Stock$6.5 B$24.66$24.12233,57812/31/212.26%8.68%
+ACBI7/23/21SouthState Corporation (SSB)All Stock$542 M$25.33$24.7759,9163/31/222.24%4.43%
+TRMT4/26/21RMR Mortgage Trust (RMRM)Cash Plus Stock$252.33 M$5.60$5.4817,1189/30/212.16%262.69%
+RBNC7/15/21United Community Banks, Inc. (UCBI)All Stock$517 M$30.00$29.3731,0333/31/222.14%4.22%
+WBT7/14/21Ali Holding S.r.l. (N/A)All Cash$4.8 B$24.00$23.5931,3731/31/222.13%6.16%
+FRTA2/22/21Quikrete Holdings, Inc. (N/A)All Cash$2.74 B$24.00$23.5195,14312/31/212.08%8.01%
+GSKY9/15/21The Goldman Sachs Group (GS)All Stock$2.24 B$11.73$11.495,668,0143/31/222.05%4.04%
+RIVE7/01/21Mid Penn Bancorp, Inc. (MPB)All Stock$124.7 M$12.99$12.73532,34812/31/212.01%7.72%
+ISBC7/28/21Citizens Financial Group, Inc. (CFG)Cash Plus Stock$3.5 B$14.92$14.63932,7626/30/221.98%2.62%
+SLCT6/01/21First Bancorp (FBNC)All Stock$314.3 M$17.26$16.945,92212/31/211.88%7.22%
+FVCB7/14/21Blue Ridge Bankshares, Inc. (BRBS)All Stock$113.36 M$19.86$19.57,7551/31/221.84%5.32%
+FBC4/26/21New York Community Bancorp, Inc. (NYCB)All Stock$2.6 B$50.95$50.08225,14912/31/211.74%6.69%
+STFC7/12/21Liberty Mutual Holding Company Inc. (N/A)All Cash$2.48 B$52.00$51.1473,6703/31/221.68%3.32%
+GNOG8/09/21DraftKings Inc. (DKNG)All Stock$1.52 B$18.74$18.44615,0763/31/221.60%3.16%
+PNM10/21/20Avangrid, Inc. (AGR)All Cash$8.05 B$50.30$49.51834,37812/31/211.60%6.13%
+CXP9/07/21Pacific Investment Management Company LLC (N/A)All Cash$3.9 B$19.30$19.023,501,10712/31/211.47%5.66%
+FMBI6/01/21Old National Bancorp (ONB)All Stock$2.86 B$18.76$18.49393,0581/31/221.47%4.25%
+INOV8/19/21Nordic Capital (N/A)All Cash$7.3 B$41.00$40.41858,4211/31/221.46%4.23%
+ESXB6/03/21United Bankshares, Inc. (UBSI)All Stock$303.3 M$10.69$10.5424,72812/31/211.45%5.58%
+NUAN4/12/21Microsoft Corp (MSFT)All Cash$19.7 B$56.00$55.221,660,20012/31/211.41%5.43%
+PPD4/15/21Thermo Fisher Scientific Inc. (TMO)All Cash$20.9 B$47.50$46.85942,41412/31/211.39%5.33%
+STL4/19/21Webster Financial Corporation (WBS)All Stock$5.12 B$23.91$23.61,386,97412/31/211.33%5.11%
+ENBL2/17/21Energy Transfer LP (ET)All Stock$7.2 B$7.98$7.88364,55612/31/211.22%4.69%
+FCCY7/12/21Lakeland Bancorp, Inc. (LBAI)All Stock$244.4 M$23.45$23.1812,6061/31/221.15%3.34%
+SPWH12/21/20The Great American Outdoors Group (N/A)All Cash$1.5 B$18.00$17.8305,51212/31/211.12%4.32%
+ECHO9/10/21The Jordan Company, L.P. (N/A)All Cash$939.64 M$48.25$47.73612,56812/31/211.09%4.19%
+PBCT2/22/21M&T Bank Corporation (MTB)All Stock$7.6 B$16.90$16.731,817,06312/31/211.04%4.01%
+DSPG8/30/21Synaptics Incorporated (SYNA)All Cash$399.78 M$22.00$21.78183,71412/31/211.01%3.88%
+UFS5/11/21Paper Excellence (N/A)All Cash$3.02 B$55.50$54.98188,37912/31/210.95%3.63%
+SVBI3/03/21Shore Bancshares, Inc. (SHBI)Cash Plus Stock$146 M$12.46$12.355609/30/210.93%112.96%
+RAVN6/21/21CNH Industrial N.V (CNHI)All Cash$2.1 B$58.00$57.52181,93412/31/210.83%3.21%
+RPAI7/16/21Kite Realty Group Trust (KRG)All Stock$4.96 B$12.95$12.85898,86612/31/210.75%2.87%
+GPX7/15/21Learning Technologies Group (N/A)All Cash$394 M$20.85$20.743,72012/31/210.72%2.78%
+VER4/29/21Realty Income Corporation (O)All Stock$17.66 B$46.85$46.541,314,09712/31/210.68%2.59%
+CADE4/12/21BancorpSouth Bank (BXS)Cash Plus Stock$2.7 B$21.94$21.79605,12212/31/210.67%2.56%
+SIC8/09/21Sun Capital Partners, Inc. (N/A)All Cash$411 M$14.50$14.4168,85410/31/210.62%6.70%
+SCR8/05/21Penn National Gaming, Inc. (PENN)Cash Plus Stock$2 B$35.16$34.96180,1073/31/220.57%1.12%
+CVA7/14/21EQT Infrastructure (N/A)All Cash$5.35 B$20.25$20.14316,68312/31/210.55%2.10%
+JMP9/08/21Citizens Financial Group, Inc. (CFG)All Cash$149 M$7.50$7.4624,90412/31/210.54%2.06%
+CLDR6/01/21Clayton, Dubilier & Rice and KKR (N/A)All Cash$5.3 B$16.00$15.92979,58112/31/210.50%1.93%
+EBSB4/23/21Independent Bank Corp. (INDB)All Stock$1.15 B$20.33$20.23318,02612/31/210.48%1.86%
+CNBKA4/07/21Eastern Bankshares, Inc. (EBC)All Cash$642 M$115.28$114.7519,54412/31/210.46%1.77%
+NNA8/26/21Navios Maritime Partners L.P. (NMM)All Stock$1.93 B$3.80$3.78118,23712/31/210.45%1.72%
+VEI8/10/21Chesapeake Energy Corporation (CHK)Cash Plus Stock$2.2 B$15.77$15.7123,25012/31/210.42%1.60%
+MGLN1/04/21Centene Corporation (CNC)All Cash$2.2 B$95.00$94.6177,40912/31/210.41%1.58%
+CSOD8/05/21Clearlake Capital Group, L.P. (N/A)All Cash$5.2 B$57.50$57.27658,83512/31/210.40%1.54%
+BMTC3/10/21WSFS Financial Corporation (WSFS)All Stock$976.4 M$42.41$42.2542,79412/31/210.37%1.44%
+MDLA7/26/21Thoma Bravo (N/A)All Cash$6.4 B$34.00$33.88971,24212/31/210.35%1.36%
+XEC5/24/21Cabot Oil & Gas Corporation (COG)All Stock$8.59 B$81.66$81.39888,45812/31/210.33%1.26%
+IEC8/12/21Creation Technologies Inc. (N/A)All Cash$242.3 M$15.35$15.31210,33510/31/210.26%2.80%
+CAI6/17/21Mitsubishi HC Capital Inc. (N/A)All Cash$2.9 B$56.00$55.8670,97512/31/210.25%0.96%
+JAX7/02/21SPB Hospitality LLC (N/A)All Cash$220 M$14.00$13.9740,54111/15/210.21%1.60%
+LDL6/21/21Unifrax (N/A)All Cash$1.3 B$62.10$61.9881,77512/31/210.19%0.74%
+STMP7/09/21Thoma Bravo (N/A)All Cash$6.6 B$330.00$329.39203,2399/30/210.19%22.53%
+QADA6/28/21Thoma Bravo (N/A)All Cash$2 B$87.50$87.37112,03212/31/210.15%0.57%
+BOCH6/24/21Columbia Banking System, Inc. (COLB)All Stock$266 M$14.83$14.81128,69812/31/210.15%0.57%
+ALTA5/18/21Glacier Bancorp, Inc. (GBCI)All Stock$933.5 M$41.81$41.7948,46212/31/210.04%0.16%
+LMRK8/23/21Landmark Dividend LLC (N/A)All Cash$997.25 M$16.50$16.5209,39312/31/210.00%0.00%
+KOR9/13/21AngloGold Ashanti Limited (N/A)All Cash$450 M$3.20$3.2173,7273/31/220.00%0.00%
+SC8/24/21Santander Holdings USA, Inc. (N/A)All Cash$12.7 B$41.50$41.521,064,77512/31/21-0.05%-0.19%
+PMBC3/23/21Banc of California (BANC)All Stock$235 M$9.35$9.3634,2259/30/21-0.11%-13.00%
+ANAT8/09/21Brookfield Asset Management Reinsurance Partners Ltd. (BAMR)All Cash$5.1 B$190.00$190.3637,2556/30/22-0.19%-0.25%
+MGP8/04/21VICI Properties Inc. (VICI)All Stock$17.2 billion$40.61$40.8485,4206/30/22-0.46%-0.61%
+CLDB6/23/21Farmers National Banc Corp. (FMNB)All Stock$124 M$27.00$27.1613,22512/31/21-0.58%-2.23%
+XOG5/10/21Bonanza Creek Energy, Inc. (BCEI)All Stock$2.6 B$53.79$54.16122,8929/30/21-0.69%-83.43%
+ICBK6/22/21Nicolet Bankshares, Inc. (NCBS)All Stock$219 M$35.25$35.6818,79212/31/21-1.22%-4.67%
+SBBP5/24/21Xeris Pharmaceuticals, Inc. (XERS)All Stock$267 M$1.95$2.0975,96911/15/21-6.60%-49.13%
+VNE7/22/21Magna International Inc. (MGA)All Cash$3.3 B$31.25$34.86541,25712/31/21-10.36%-39.79%
+FIVN7/18/21Zoom Video Communications, Inc. (ZM)All Stock$14.7 B$150.70$172.251,460,6046/30/22-12.51%-16.55%

Conclusion:

Even as we see multiple deals receiving shareholder approvals every week, we also notice regulators stepping in every now and then to challenge deals and ask companies to refile to provide more time for review. In the case of the Five9 – Zoom deal, there is evident risk involved with respect to regulatory approvals with Five9 having operations in Russia and Zoom having ties in China.

Disclaimer: I have long positions in Nuance Communications (NUAN), Change Healthcare (CHNG), Trillium Therapeutics (TRIL), Zoom (ZM) and Twilio (TWLO). I also have put options in Change Healthcare. Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.