The boom in Zoom Video Communication’s share price has turned its founder and chief executive Eric Yuan into one of the world’s richest people. Investors may have been confused by Zoom Technologies’ use of the stock market ticker ZOOM, while Zoom Video Communication has the ticker ZM.
The US Securities and Exchange regulator intervened to suspend trading in Zoom Technologies. Shares in Zoom Technologies soared by more than 1,500% as investors rushed to buy shares in what they thought was the video app company – but was actually a defunct Chinese wireless communications company. Some investors got so excited, they accidentally invested in the wrong Zoom. That gives the company a market value of $42bn – more than eight times the market capitalisation of British Airways owner International Consolidated Airlines Group, for example.
Zoom Video Communication’s share price has soared from under $70 a share in January, before the coronavirus struck western countries, to $150 on Monday. Zoom’s recent surge in popularity has not gone unnoticed by investors. The company reported an 85% increase in revenue to $166.6m (£132m) in the three months to the end of October, the latest quarterly figures available. Corporate licences for big companies cost £15.99 per month per host (and require a minimum of 50 hosts). But it is the world of big business, for which Zoom was intended, that brings in most of the revenue. It offers a free version for calls of less than 40 minutes. The app has been used to host virtual classrooms, church services and even blind dates and stag dos. The company does not provide daily download figures, but app tracking firm Apptopia said Zoom was downloaded 2.13m times around the world on 23 March, the day the lockdown was announced in the UK– up from 56,000 a day two months earlier. Zoom, which allows users to talk to up to 99 other people simultaneously, has emerged at the top of the pile with the app often leading the download charts in Apple’s app store.
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