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David Dierking

Zoom vs. Zoom: Buying The Wrong One Has Led To 900% Gains

If you've been looking to make money in the midst of the coronavirus-inspired economic shutdown, you've probably at least looked at Zoom. That's the company produces video conferencing software and equipment and has been a big beneficiary of the "work from home" movement.

But if you want to buy Zoom stock, make sure you're buying the right one.

There's Zoom Video Communications (ZM), the video conferencing company that most of you are probably at least familiar with at this point. Then there's Zoom Technologies (ZOOM), the Chinese micro-cap that does, well, I'm not really sure. They used to be involved in modems but it appears that's no longer the case. Supposedly, the company hasn't reported earnings since 2011, so I think it's safe to say that they're pretty much non-operational at this point.

But that hasn't stopped investors from buying.

Thanks to the ticker confusion, shares of ZOOM have shot through the roof. They're up nearly 900% year-to-date after being up as much as 2500% a couple weeks ago. The stock has gone from trading just a couple thousand shares a day to more than 700,000 at its peak.

The "real" Zoom has had a terrific year so far in its own right. It's up more than 100% year-to-date and now carries a market cap of around $40 billion, more than JetBlue, Delta and Southwest Airlines combined.

The lesson, of course, is know what you're buying. It's one thing to buy a triple-leveraged oil ETF not understanding exactly how risky it is. It's a whole different thing to buy a Chinese micro-cap stock that hasn't had legitimate operations in nearly a decade.

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