Zoom shares fall after user files lawsuit claiming data breach

Videoconferencing firm has doubled in value over past 12 months

In this photo illustration a Zoom App logo is displayed on a smartphone on March 30, 2020 in Arlington, Virginia.  The Zoom video meeting and chat app has become the wildly popular host to millions of people working and studying from home during the coronavirus outbreak. / AFP / Olivier DOULIERY

Shares in Zoom Video Communications dipped 3.8 per cent on Tuesday following a lawsuit by a user who claims the videoconferencing service illegally disclosed personal information.

While Zoom shares have fallen so far this week, the stock has more than doubled from the $62 closing price on its first day of trading in April last year. The stock was trading at $145.16 at 11:35am in New York on Tuesday, giving the company a $40.5 billion (Dh148.7bn) market capitalisation.

The shares have soared 113 per cent this year as people have been forced to work from home amid the coronavirus pandemic, often conducting conference calls and online education over Zoom. The stock has been a rare gainer amid a vast market correction.

But the California-based company is sure to face more scrutiny as it becomes a core piece of how people work and interact from their homes. The user lawsuit alleges that the company collects information when people install or open the Zoom application and shares that information with third parties, including Facebook.

Zoom didn’t respond to a request for comment on the lawsuit Monday night.

In addition to the user lawsuit, the New York Times reported that the company is facing scrutiny from New York's attorney-general.

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