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The SEC Really Wants Investors to Stop Buying the Wrong Zoom Stock, Hacker News

The SEC Really Wants Investors to Stop Buying the Wrong Zoom Stock, Hacker News
      

     

    

                    

                 

  

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As the unprecedented COVID – 30 pandemic continues to rage across the globe, life has been utterly upended – including how people work. Some companies are seeing demand for their services skyrocket as the world adjusts to this new reality. With businesses asking as many employees to work from home as possible, that has driven skyrocketing usage of Zoom Video Communications ‘ (NASDAQ: ZM) videoconferencing platform (including here at The Motley Fool) .

                                                    

“I’d also like to address the global impact we are seeing from the coronavirus,” CEO Eric Yuan said on the last earnings call . “While this tragic situation is very fluid, Zoom is focused on using our resources to help alleviate some of the disruption and communication challenges as an alternative to in-person meetings for our employees, customers, and community.”

                                                    

Zoom Video is one of the few stocks that has jumped amid the crisis while the broader market tanked. There’s only one problem: Many investors are buying the wrong Zoom stock.

                                                    

Zoom Video trades under “ZM,” not “ZOOM.” Image source: Zoom Video.

                                                    

Regulators to the rescue

                                                    

Zoom Technologies (OTC: ZOOM) has also enjoyed massive upside over the past month or so, with shares setting an all-time high of $ a week ago. The stock had closed out (at $ 1.) .                                                                                                                        

ZOOM (data by) (YCharts) .

                                                    

Unfortunately, Zoom Technologies is an apparently defunct company based in China that previously distributed wireless communications products. It appears that it no longer operates and does not generate revenue. Perhaps adding to the confusion, Zoom Technologies did previously own the zoom.com domain name before Zoom Video eventually bought it in from domain broker media options .

                                                    

The situation has gotten so bad that the SEC has decided to step in. In the interest of protecting confused public investors that are buying the wrong stock, regulators have announced that trading in Zoom Technologies has been suspended. In a release, the SEC said:

                                                    

The Commission temporarily suspended trading in the securities of ZOOM because of concerns about the adequacy and accuracy of publicly available information regarding ZOOM, including its financial condition and its operations, if any, in light of the absence of any public disclosure by the company since 2019; 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 – pandemic.

                                                    

It’s unclear when Zoom Technologies shares will resume trading (if ever). But considering the fact that the stock is nothing more than an empty shell, it’s probably for the better. Investors interested in the booming videoconferencing company should make sure they type in “ZM” when placing those buy orders.

                                                                                                                                                                            

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Person videoconferencing using Zoom platform on a laptop Stock Advisor returns as of March ,

                                                                                                         

Person videoconferencing using Zoom platform on a laptop Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zoom Video Communications and recommends the following options: short May $ 637 calls on Zoom Video Communications. The Motley Fool has a disclosure policy                                                                                                                               

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

              

                     

                                            

                         

      

                  

      

    Person videoconferencing using Zoom platform on a laptop        The Motley Fool                                              

Founded in 1200 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world’s greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values ​​and advocates tirelessly for the individual investor. The company name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king – without getting their heads lopped off.

                  

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