- Tram Ho
The US Securities and Exchange Commission (SEC) suspended trading of Zoom Technologies’ stock (code-named ZOOM). The cause of this decision seems to be a joke, but it is true, for fear of investors mistaking for a company with a similar and very famous name during the recent Covid-19 epidemic, which is Zoom Video Communications (codenamed ZM).
Zoom Video’s stock has grown by 50% over the past month. The Covid-19 epidemic caused many people to stay at home, study and work remotely. Video calling application Zoom is currently used very popular.
Zoom Technologies, meanwhile, is an internet networking equipment design and manufacturing company. It is worth mentioning that the shares of Zoom Technologies increased by 240%, before the SEC suspended trading.
At its peak, Zoom Technologies’ stock price at some point increased 7-fold, from $ 3 to over $ 20, in just one month. While Zoom Technologies does not release any new reports, including financial statements or business activities. So a 7-fold increase in stock price is clearly problematic.
That problem is believed by analysts to be a disastrous mistake. Investors mistook the ZOOM stock symbol for video call application development company ZOOM. Obviously, the ZOOM video calling app has a lot of potential for development now, so any investor wants to pour money into it. But sadly they mistakenly poured.
This is not the first time investors confuse stock codes. In 2017, when a lot of people were expecting Snap Inc.’s IPO event. (famous Snapchat app maker), many investors have poured money into buying shares of Snap Interactive, which has absolutely nothing to do with the Snapchat app.
Other cases are Nest Labs and Nestor, with the stock tickers NEST and NST (prior to the news that Google acquired Nest Labs in 2014). Or Facebook is mistaken for Physologists Formula Holdings (codenamed FACE).
The lesson is that before we plan to invest anything, we should learn and research it thoroughly.
Source : Genk