The right Zoom is
taking off. But, the wrong Zoom has really taken off!
ZOOM is the equity ticker of wrong Zoom, a Chinese
company called Zoom Technologies that has done nothing remarkable this
year. But at one point, wrong Zoom's stock was
up 1890% since year-end 2019.
Meanwhile right Zoom, Zoom Video Communications, is based in
California. It stock trades under the ticker ZM and has enjoyed some
nice gains too (max of 135% up since year-end).
On March 25, 2020, the SEC suspended trading in wrong
Zoom:
“It appears to the Securities and Exchange Commission that the public interest and the protection of investors require a suspension of trading in the securities of Zoom Technologies, Inc. (“ZOOM”) (CIK# 0000822708) 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.”
Notes on wrong Zoom: Zoom Technologies Inc., headquartered in Beijing, has
zero reported revenue since 2011. It was
delisted from NASDAQ in October 2014.
The stock trades OTC in the US,
specifically in the “Grey Market,” and dealers may only quote the stock on
behalf of an unsolicited customer order.
Since April 18, 2019 OTC Markets has designated the stock “Caveat
Emptor” (along with a skull and cross-bones marker), to highlight to market participants that Zoom Technologies Inc. (ticker: ZOOM) is
not related to Zoom Video Communications, Inc. (ticker: ZM). [1] Caveat
Emptor is a designation that OTC Markets reserves for the sketchiest of
penny stocks.
On March 25, 2020, the SEC
suspended trading in ZOOM. Wrong Zoom's stock resumed trading April
14, 2020 under the ticker ZTNO.
We are not aware of anyone making the case that the market
for grey market OTC stocks with “Caveat Emptor” designations is an efficient
market; but still, who were/are these purchasers of ZOOM? Did many actually confuse wrong Zoom with right Zoom, or was it predominantly speculative traders betting that other
folks would confuse the two stocks, under a “greater fool” theory?
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