Some Wall Street investors are getting rich off Zoom — just the wrong one.
Much has been made of the buzzy public debut of Zoom Video Communications Inc. ZM, +73.06% the enterprise videoconference software company with a $1 billion valuation (prior to its IPO), that made its debut on the Nasdaq Inc. NDAQ, -0.12% exchange Thursday midday, but the shares of another unrelated company have been more aptly zooming over the past 30 days.
Zoom Technologies Inc. ZOOM, +12.24% an over-the-counter penny stock, with the ticker “ZOOM,” which last month was worth less than a penny, has soared an eye-popping 56,000% in the past 30 days, raising the question of whether it has been riding the euphoria surrounding the other Zoom.
Most recently Thursday, shares of Zoom Technologies, which describes itself as a telecommunications company, were up 61%.
Its recent gains mean that $100 invested in the entity on March 21, when shares were around $0.005, would have netted an investor about $84,000 as of Thursday morning.
Business Insider spotlighted the apparent ticker confusion back in March, but the shares have only extended their parabolic surge, indicating that seemingly clueless investors continue throwing money (rightly or wrongly, depending on one’s perspective) at the wrong Zoom.
Read: Zoom Video raises expected IPO pricing range, boosting potential market cap to more than $9 billion
Zoom Tech., for one, hasn’t reported revenue since 2011 and apparently filed with the Securities and Exchange Commission to end its tenure as a publicly listed company to no avail.
Attempts by MarketWatch to contact the company weren’t immediately successful.
To be sure, this sort of confusion between a tiny company with a similar-sounding name, or ticker symbol, and a buzzier privately listed entity set to make a debut on a public market, isn’t unprecedented.
For example, Back in 2013, as microblogging site Twitter Inc. TWTR, +0.01% was set to go public, Tweeter Home Entertainment Group Inc., saw its shares soar more than 500%, forcing a halt of its stock.
At that time, Tweeter shares continued to score bids despite the fact that the Boston-based consumer electronics chain had gone into chapter 11 bankruptcy and liquidated its assets in 2008, six years before Twitter’s IPO.
On a year-to-date basis, Zoom Tech’s shares have climbed 44,900%, compared with the S&P 500 index’s SPX, +0.22% meager-by-comparison 15.5% gain, the Dow Jones Industrial Average’s DJIA, +0.54% 13.4% return and the Nasdaq Composite Index’s COMP, +0.00% nearly 20% return so far in 2019.
Meanwhile, Zoom Video Communications Inc., which has the ticker “ZM,” kicked off trade at a $65 price, compared with its pricing of $36 the previous day. It currently boasts a market capitalization of about $14.6 billion, with its shares up 75%, according to FactSet late Thursday.
Its shareholders, perhaps, may be hoping that it performs nearly half as well as its doppleganger.
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