The SEC is temporarily suspending trading of securities in Zoom Technologies Inc., ticker symbol ZOOM, effective Thursday, until April 8. The Beijing-based Delaware corporation has not made public disclosures since 2015. The stock was delisted from the Nasdaq in 2014, trading at fractions of a penny as recently as 2019.
Yet it seems to have presumably seen its share of a few fat finger trades.
That’s because Zoom Technologies is apparently commonly confused with Zoom Video Communications Inc. The latter has seen an explosion of interest with the novel coronavirus pandemic forcing shutdowns across the country and many turning to videoconferencing to work remotely. It’s even inspired its own terminology, as “Zoom bombing,” a phenomenon caused by misaligned settings, joins the list of situations advisors want to avoid.
The SEC’s move is designed to cut down on confusion in the market and on fintwit, alike. The trading halt went into effect “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,” noted the SEC.
“If any broker or dealer enters any quotation which is in violation of the rule, the commission will consider the need for prompt enforcement action,” it warned.
Apparent ticker symbol confusion between the two firms resulted in Zoom Technologies Inc. seeing wild fluctuations in price at the time of Zoom Video Communications Inc.’s IPO. Zoom Video Communications trades under the ticker symbol ZM.
