Eric Yuan, founder and chief executive officer of Zoom Video Communications Inc., center, celebrates during the company’s initial public offering at the Nasdaq MarketSite in New York on April 18, 2019. Zoom reported net income of $7.6 million on revenue of $331 million for the year ended January, and is now worth nine times the $1 billion valuation it secured after a funding round two years ago.
Victor J. Blue | Bloomberg | Getty Images
The Securities and Exchange Commission suspended trading of Zoom Technologies on Thursday, partly because investors are confusing it with Zoom Video, which has seen a surge share price due to COVID-19. It will resume trading April 9.
Zoom Video, which provides videoconferencing services and trades under the ticker symbol “ZM,” is a key component for many businesses shifting to remote work during the coronavirus pandemic. That’s led to the company, which went public last year, to see a surge in users and stock price rise of more than 112% this year so far — a rarity in the current coronavirus-induced down market. It’s now got a market cap north of $40 billion.
However, traders have also bid up the much smaller Zoom Technologies, which has the ticker symbol “ZOOM”. Its stock is up more than 50% this month and nearly 900% this year. The company has not disclosed financial information since 2015, the SEC says.
“The Commission temporarily suspended trading in the securities of ZOOM because of concerns about the adequacy and accuracy of publicly available information concerning ZOOM, including its financial condition and its operations, if any, in light of the absence of any public disclosure by the company since 2015; and concerns about investors confusing this issuer with a similarly named NASDAQ-listed issuer, providing communications services, which has seen a rise in share price during the ongoing COVID-19 pandemic,” the SEC said in a filing.