There were a number of big headlines in tech, particularly a significant settlement between tech giant Apple (NASDAQ:AAPL) and semiconductor company Qualcomm (NASDAQ:QCOM). In addition, initial public offerings from cloud-based video-conferencing company Zoom (NASDAQ:ZM) and ideas platform Pinterest (NYSE:PINS) managed to grab the market's attention as their stock prices soared.
Here's a closer look at these stories.
Apple and Qualcomm drop litigation
In perhaps the biggest news in tech this week, Apple and Qualcomm agreed to drop all litigation. The deal included a payment from Apple to Qualcomm estimated to be between $5 billion and $6 billion. In addition, the two companies reached a global six-year patent license agreement with a two-year option to extend as well as a multi-year arrangement for Qualcomm to supply chips to Apple.
The deal "reflects value and strength of Qualcomm's intellectual property," Qualcomm said in a press release about the deal.
Qualcomm shares surged 23% on Tuesday as investors digested the news.
Additional notable news during the week included the initial public offering of video-conferencing company Zoom. Shares surged on Thursday, when Zoom went public. With an IPO price set at $36 going into the offering, shares initially jumped 80% but closed the stock's first day of trading up 72% at $62.
Hype for the stock isn't surprising. Not only did the company's revenue more than double last fiscal year to $330.5 million, but Zoom is profitable. Cash from operations was $51.3 million in fiscal 2019, up from $19.4 million in fiscal 2018. Net income was $7.6 million in fiscal 2019, up from a loss of $3.8 million in fiscal 2018.
But with a $16.2 billion market capitalization, shares are unfortunately looking pricey now. Zoom trades at nearly 50 times sales.
Pinterest, a social network for finding and organizing ideas, also went public on Thursday. The stock ended its first trading day up 28% from its IPO price. This gave the company a market capitalization of nearly $13 billion.
Pinterest's revenue has been growing rapidly, rising from $473 million in 2017 to $756 million in 2018. The company, however, is still losing money. Though its loss narrowed from $130 million in 2017 to $63 million in 2018.
Pinterest said in its S-1 filing with the Securities and Exchange Commission that it has over 250 million users.