The Zooms are zooming.
Zoom Video Communications, Inc., also known as Zoom, went public today on the Nasdaq stock exchange. Zoom, which licenses video-conferencing technology, made $7.5 million in 2018, making it the rare technology IPO that is profitable.
Investors rewarded Zoom for that track record in the company’s first day of trading. Shares surged to as high as 75% above its $36 IPO price for most of the day, before closing at $62, a 72% gain.
Zoom Video Communications, which trades under the ticker “ZM,” wasn’t the only company to benefit from the IPO. In a weird quirk of the market, similarly named Zoom Technologies, Inc., a penny stock that trades over the counter (i.e., not through an exchange) under the ticker “ZOOM,” also soared on April 18—at least until investors seemed to figure out they might be buying the wrong Zoom.
Zoom Technologies incorporated in the early 2000s as a company that designed, produced, marketed, and sold various communications technologies, such as broadband and dial-up modems, and Bluetooth products. In 2009, Zoom spun off that business and became a holding company for entities such as Gold Lion Holding Limited, Profit Harvest Corporation Limited, and Silver Tech Enterprises Limited.
In September 2014, Zoom filed paperwork to voluntarily withdraw its stock from the Nasdaq, a few months after being notified that it no longer met requirements for continued listing. (As of writing, Zoom Technologies couldn’t be reached for comment.)
Judging by its stock price, Zoom Technologies seems to have benefited from the hype surrounding the impending Zoom Video Communications IPO for the better part of a month. Since March 20, the share price of Zoom Technologies has gained nearly 27,000%. It hit a recent high of $5.76 on April 15, a nearly 60,000% gain over its March 20 price of $0.01, before sliding back to $1.30 the following day. When your stock is only worth pennies on the dollar, volatility is the name of the game.