Zoom falls 11% after CEO apologizes for security lapses, says daily users spiked to 200 million in March

Eric Yuan, CEO, Zoom Video Communications

Source: CNBC

Zoom CEO Eric Yuan apologized on Thursday for security lapses that have been reported this week and outlined what the company is doing to fix those problems. 

He also said the company saw a huge spike in users, up to 200 million people per day in March, from about 10 million in December.

Zoom closed at $121.93 per share, down 11% on the day. Shares of Zoom were down as much as 16% on Thursday morning. 

We recognize that we have fallen short of the community’s — and our own — privacy and security expectations,” Yuan said. “For that, I am deeply sorry, and I want to share what we are doing about it.”

Zoom has been criticized for “zoombombing” intrusions and for sharing data with Facebook, abusing permissions on Mac, not properly describing how it encrypts data and having a vulnerability that allegedly exposes Windows login credentials to hackers.

Yuan said the product was designed for enterprises that run huge “security reviews” of its app. He said it wasn’t designed “with the foresight that, in a matter of weeks, every person in the world would suddenly be working, studying and socializing from home.” 

To fix some of these issues, Yuan said Zoom will commit to working on privacy for the next 90 days and will freeze work on all other features. It will include a bug bounty program, which pays people who discover and report security flaws, and a review of the platform with third-party experts. Yuan also said he’ll host a weekly webinar on Wednesdays at 7 a.m. ET to discuss the company’s progress.

Yuan founded Zoom in 2011, and it began trading on the Nasdaq on April 18, 2019, at $36 a share. It reached a 52-week high of $164.90 on March 23. On Thursday, it was trading below $127.

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