Both Zoom Video Communications (NASDAQ:ZM) and Zoom Technologies (OTCMKTS:ZOOM) have made major moves on Wall Street in recent weeks. However, it appears some confusion has allowed ZOOM stock to ride on the coattails of ZM stock.
On Thursday, the Securities and Exchange Commission suspended trading of Zoom Technologies stock until April 9. This comes after more and more people worldwide are having to work remotely due to the coronavirus from China outbreak. And in turn, employers are turning to video conferencing tools from Zoom Video in order to connect with their employees.
Because of this, ZM stock has gained nearly 40% in the past two weeks and investors have taken notice. When going to buy shares, though, many people have apparently confused the two similar-sounding companies.
This issue has caused a 108% rise in the ZOOM stock over the same two-week period, and nearly 900% year-to-date. This is the second time this has happened in nearly a month, and now the SEC is stepping in.
“The Commission temporarily suspended trading in the securities of ZOOM because of concerns about the adequacy and accuracy of publicly available information concerning ZOOM, including its financial condition and its operations, if any, 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,” the SEC said.
ZM stock was up 7.3% on Friday afternoon.
Nick Clarkson is a Web Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.
