SEC suspends Zoom Technologies as investors confuse it with Zoom Video
The Chinese firm's shares have surged ten times since the start of this year
The US Securities and Exchange Commission temporarily suspended the trading of Chinese company Zoom Technologies, partly because investors were confusing it with California-headquartered Zoom Video that saw its share price surge over 100 per cent over the past three months due to the coronavirus pandemic.
“The Commission temporarily suspended trading in the securities of Zoom because of 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 a statement.
Trading will resume on April 9.
Zoom Technologies was also suspended as it has not made any public disclosure in the last five years, raising questions over its finances and authenticity of operations.
“There are also concerns about the adequacy and accuracy of publicly available information concerning it, including its financial condition and its operations, if any, in light of the absence of any public disclosure by the company since 2015,” the regulator said.
Zoom Technologies is a Delaware corporation that reported to the SEC in 2014 having its principal executive offices in Beijing.
The Commission also cautioned 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”.
Floated in April 2019, the video-conferencing app Zoom Video has seen a massive jump in the past two months as hundreds of millions of people are confined to their homes due to lockdowns to contain the Covid-19 pandemic. Its shares have more than doubled since January and its market capitalisation stands at $40.3 billion (Dh147.9bn).
Zoom Technologies’ shares have surged ten times since the start of this year. Its market valuation is only $31.3 million.
It is not the first time that Zoom Technologies has benefited from its larger namesake. Its stock had jumped more than 80 per cent on the day of Zoom Video’s listing in April, last year, according to the Financial Times.
Updated: March 28, 2020 04:26 PM