Wednesday 1 April 2020
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businessinsider - 6 days ago

The SEC stopped trading on an over-the-counter stock because people were confusing it with Zoom Video, which has soared amid the coronavirus lockdown

Enough traders mixed up Zoom Video stock with Zoom Technologies that the Securities and Exchange Commission halted trading of the latter s shares. The agency cited concerns about investors confusing this issuer with a similarly-named NASDAQ-listed issuer in a Thursday statement. Zoom Video shares have soared through 2020 as increased work-from-home activity drives new interest in its videoconferencing software. Similar misunderstandings took place in April 2019, when Zoom Video s IPO drove enough traders to Zoom Technologies for its stock to jump nearly 100%. Watch Zoom Video trade live here. Zoom Video Communications and Zoom Technologies. So many traders mixed up the two companies that the Securities and Exchange Commission had to step in. The SEC temporarily suspended trading of Zoom Technologies on Wednesday, citing concerns about investors confusing this issuer with a similarly-named NASDAQ-listed issuer in a statement. The agency also pointed to the lack of any public disclosures from Zoom Technologies since 2015 as a factor in its trading suspension. Zoom Video Communications has enjoyed major gains amid the coronavirus pandemic as more people work from home and use its videoconferencing software. Shares of the company are up roughly 116% year-to-date. Zoom Technologies stock was up more than 800% year-to-date before its trading halt, but the firm has little in common with the similarly named firm. The stock jumped 23% on Wednesday alone. It s likely that traders looking to profit on the boom in videoconferencing activity mistook Zoom Technologies shares for Zoom Video and drove record interest in the over-the-counter stock. Read more: GOLDMAN SACHS: Buy these 14 stocks, which all possess the 3 most important qualities for shielding against coronavirus fallout The two firms use similar tickers too, with Zoom Video trading under ZM and Zoom Technologies trading as ZOOM. The Commission cautions broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company, the SEC warned Thursday afternoon. The suspension will last from Thursday s open to 11:59 p.m. ET on April 8, the agency added. A similar switch-up between the two firms happened when Zoom Video went public in April 2019. Zoom Technologies rallied nearly 100% on the IPO day despite having no new information for traders to buy into. Now read more markets coverage from Markets Insider and Business Insider: Billionaire investor Bill Ackman turned $27 million into $2.6 billion by betting that the coronavirus would tank the market JPMorgan slashes its GDP forecast for next quarter now sees a 25% contraction and imminent recession despite Herculean stimulus measures Leaked email reveals Tesla is furloughing some workers in Norway after a big drop in demand caused by the coronavirus Join the conversation about this story NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the 3rd wave firms that are leading the next round of tech disruption


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