Zoom Video’s Stock Soared in Public Debut. So Did Zoom Technologies’. – The New York Times

Get the DealBook newsletter to make sense of major business and policy headlines — and the power-brokers who shape them.
__________

Shares of Zoom Video Communications soared more than 72 percent in the company’s trading debut last week, capping a roughly 1,700 percent rise in its value over the past two-plus years.

Yet it wasn’t even the best performing stock named Zoom in the past month. Since late March, shares in Zoom Technologies, a so-called penny stock whose ticker symbol is “ZOOM,” have jumped nearly 27,000 percent.

On March 21, a share of Zoom Technologies traded at less than a penny, although none traded hands that day, according to FactSet. The next day, Zoom Video filed paperwork for an initial public offering, and Zoom Technologies shares rose to 6 cents. The stock hit a high last Monday of $5.76 and finished Thursday at $2.70 with nearly one million shares trading hands.

Zoom Technologies is hardly the first penny stock, typically defined as stocks that trade for less than $5 but often below a buck, to pop on news from a similarly named company. Here’s a quick look at a few notable instances.

Tweeter, Twitter: In late 2014, shares of Tweeter Home Entertainment got caught up in the excitement surrounding Twitter’s initial public offering. The ticker symbol for the bankrupt electronics retailer was “TWTRQ,” just a letter off Twitter’s “TWTR.” On the day Twitter revealed its ticker, shares of Tweeter jumped as much as 1,800 percent.

Snap: Snap Interactive had been making dating applications for social networks for years when Snapchat decided in late 2016 to rebrand itself as Snap ahead of its I.P.O. Snap Interactive sued for trademark infringement, seeking to block the name change. But in the weeks ahead of Snap’s I.P.O. in March 2017, shares of Snap Interactive soared as much as 120 percent and then gained 18 percent on the day Snap’s stock began trading. Snap Interactive changed its name to PeerStream last year.

Nest: In early 2014, Google bought Nest Labs, the manufacturer of smart thermostats and smoke alarms, for $3.2 billion. Nestor had once sold automated traffic enforcement equipment to state and local governments. But the company had gone into receivership in 2009. All its assets had been sold, and by 2014, its stock, worth less than a penny, had been dormant for years. But its ticker symbol was “NEST.” And its stock jumped to a high of 10 cents a share before closing at 4 cents on news of the Net Labs deal.