The Rise and Fall of Zoom: How Security Issues Affected the Pandemic's Superstar
Portfolio Pulse from Stan Vick
Zoom Video Communications Inc (NASDAQ:ZM) experienced a meteoric rise during the COVID-19 pandemic, with its stock value increasing by almost 900% in a year. However, security issues and misrepresentation of encryption practices led to a significant decline in stock value and a class-action lawsuit. In October 2023, Zoom settled the lawsuit by agreeing to pay $150M to affected investors. Despite improvements in security, Zoom faces stiff competition from Microsoft Teams and Google Meet.
July 16, 2024 | 5:58 pm
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Zoom Video Communications Inc (NASDAQ:ZM) settled a $150M lawsuit related to security issues and misrepresentation of encryption practices. Despite improvements in security, the company faces significant competition from Microsoft Teams and Google Meet.
The settlement of the lawsuit removes a significant legal overhang, which is positive. However, the ongoing competition from major players like Microsoft and Google, along with the need to regain trust in a privacy-focused market, creates uncertainty about Zoom's short-term stock performance.
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