Who's Zooming Whom?
Zoom has been one of the hottest stocks on the market this year—just not the Zoom you think.
Shares of Zoom Technologies have surged 10-fold since the first of the year. But most of those traders likely think they are buying Zoom Video Communications. ZM 7.47% The latter is a Silicon Valley wunderkind that developed a videoconferencing service, which has proven to be hugely popular with a world now stuck working at home. The former is a Chinese company that once made modems and hasn’t filed any public financial documents since 2015.
Some confusion is understandable. Zoom Technologies benefits from having the more intuitive ticker symbol ZOOM. It also benefits from being very hard to find. A Google search for “Zoom Technologies Investor Relations” leads to Zoom Video’s IR page. The Securities and Exchange Commission appears to have had enough. The agency announced Thursday that it has suspended trading on ZOOM, citing “the public interest and the protection of investors” in its orders.
They should have known something was amiss earlier on. Zoom Video went public last April in one of the hottest IPOs of the year, and it had an immediate effect on trades of the other Zoom. Daily trading volume of Zoom Technologies averaged just 384 shares in the three months leading up to Zoom Video’s first S-1 filing. On Zoom Video’s first day of trading, Zoom Technologies’ volume came just under 1 million. Investors who picked up the wrong ZOOM for a buck a share at the first of this year could have sold those for $20 a piece at the end of last week. Not bad for a sucker’s play.
https://www.wsj.com/articles/whos-zooming-whom-11585317265 (subscription)