Zoom or Zoom: Mistaken-identity trades send tiny stock up 70,000 per cent

Zoom Technologies, a Beijing-based maker of mobile phone components whose shares traded for less than 1 cent each just two months ago, has soared more than 70,000 per cent since March 12. The catalyst? Who knows, but confusion spurred by the trading debut of a much bigger company, Zoom Video Communications, is one very plausible explanation.Bloomberg

Trading in Zoom Technologies picked up in mid-March, right about the time Zoom Video, a software company that reportedly drew interest from Microsoft Corp., filed its registration for a public offering. The interest and confusion pushed the over-the-counter stock as high as $US5.76 per share, or to a market value of about $US17 million . Average trading volume in the past month has surged to nearly 75,000 shares, or 24 times the average of 3,000 shares that were traded in 2018.

Compare that to Thursday's debut of Zoom Video, whose market cap surpassed $US16 billion, with more than 13 million shares traded in the first 30 minutes after it opened. The stock gained as much as 83 per cent over the $US36 IPO price set Wednesday. The mix up was enough to concern regulators. The OTC Markets Group Thursday designated Zoom Technologies as "caveat emptor", and cautioned traders to be aware of the potential confusion between the "unrelated entities", the exchange wrote in a statement. Zoom Technologies trades under the symbol 'ZOOM,' while Zoom Video trades as 'ZM.'

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