The Securities and Exchange Commission suspended trading for “ZOOM” stock after confusion between two companies called Zoom. Zoom Video, the video conferencing platform, is traded under the ticker symbol “ZM,” but Zoom Technologies Inc. uses the symbol “ZOOM” causing some confusion on Wall Street.
Zoom Technologies stock is up more than 50 percent this month and 900 percent this year, according to CNBC, and Zoom Video has seen a stock price rise of 112 percent this year. Traders meant to invest in Zoom Video Communications, an online video-conferencing platform that has seen a rise in use as more employees are working from home, one of the effects of COVID-19.
“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 the filing.
The suspension on trading for Zoom Technologies Inc. stock will last from March 26 to April 8, the SEC said. According to TIME, Zoom Technologies is a mobile phone component producer based in Beijing with an $18 million market value. The article, which was written at the end of February, said their value doubled in the previous week as people were investing in companies that could benefit from COVID-19. In that same week, Zoom’s shares rose about 11 percent.
The SEC said they caution investors to consider the information carefully and said if a broker or dealer “enters any quotation which is in violation of the rule” they will consider enforcement actions.
