Abu Dhabi, UAETuesday 1 December 2020

Zoom shares fall after user files lawsuit claiming data breach

Videoconferencing firm has doubled in value over past 12 months

Zoom App logo - the videoconferencing company's shares ended on a sour note on Friday after Facebook disclosed plans for a competing video chat product. AFP
Zoom App logo - the videoconferencing company's shares ended on a sour note on Friday after Facebook disclosed plans for a competing video chat product. AFP

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.

Updated: March 31, 2020 10:48 PM

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