California's video conference platform Zoom opens 12% lower over security concerns

by   |  VIEW 3311

California's video conference platform Zoom opens 12% lower over security concerns

On Monday, the 6th of April 2020, Nasdaq-listed shares’ prices of Zoom Video Communication Inc. headquartered in San Jose, California that provides a platform for video conferencing, online meets, mobile collaborations alongside chats, had opened the day just a notch shy of 12 per cent lower over security concerns, while during preparation of the report, afternoon trading session in the US, Zoom stocks had pared some of its earlier losses, but were still trading 5.42 per cent lower to $121.25 per share.

As a matter of fact, latest steep downfall of the San Jose-based remote conferencing service provider came forth a couple of days after the e-vehicle industry tycoon Tesla Inc. had ordered its employees to avoid using Zoom’s video conference service citing multiple security issues.

On top of that, apart from the privacy issue that Tesla Inc. had unfurled last week, the catastrophic outlook of Zoom stocks, which lost 18.75 per cent of its market cap from its most recent peak reached on March 27th, had also been catalysed by an intransigent rise in competition from a raft of heavyweight rivals, suggested analysts.

Meanwhile, as the brokerage firm Credit Suisse had slashed Zoom stocks’ rating to “underperform” from an earlier “neutral,” but a majority of Wall St. analysts had rated the stock on “hold” despite accelerating security concerns over its video conferencing portals, Credit Suisse analysts wrote in a client note on Monday (April 6th), “While implied new customer growth may seem undemanding compared to recently disclosed 20x participant growth, we expect much of the recent surge will prove ephemeral, and/or comes from free users or education, which are very difficult to monetize.