The shares of Zoom Technologies Inc. (ZOOM) surged more than 20% on Monday as investors likely confused it with the remote conferencing platform developer Zoom Video Communications Inc. (ZM).
What Happened
Zoom Technologies is a China-based company that primarily engages in technology and communications businesses, per the description on Reuters website. The company's shares trade over the counter with ticker “ZOOM,” after it voluntarily delisted from the Nasdaq stock exchange in 2014 for failing to meet the exchange desk's requirements. Zoom Technologies has an underwhelming market capitalization of $22.59 million, even after the surge. As a large number of technology companies, including Facebook Inc. (FB) and Amazon.com Inc. (AMZN), shut down some of their offices and ask employees to work from home due to the spread of the novel coronavirus (COVID-19), the demand for companies enabling remote work also increased. One such company, Zoom Video Communications, provides users with the ability to hold remote conferences. Its shares trade at Nasdaq with the ticker “ZM.”
Why It Matters
This isn't the first time that investors have confused between the two companies. Zoom Technologies stock surged nearly 100% in April 2019 when Zoom Video Communications began trading publicly, as reported by Business Insider at the time.
Price Action
Zoom Video Communications shares closed 0.5% lower at $113.75 on Monday and traded 2% higher in the after-hours session at $116. Zoom Technologies stock closed 20.16% higher at $7.51 per share.
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