Zoom Stock Price Opens 11% Lower On Renewed Privacy Concerns

Shares of Zoom Video Communications (NASDAQ:ZM) opened the week more than 11% lower on new allegations concerning the company’s troubled privacy and security settings.

Fundamental analysis: Calls for improvement of security features, analyst turns bearish on the stock

The Washington Post reported that thousands of private video recordings from Zoom have leaked online, including business meetings, private home conversations, online classes involving details of schoolchildren etc.

Zoom issued a statement, urging its users to be cautious as to where they save videos.

These videos were found on the online storage space, and they were saved without passwords, hence a simple online search for these types of videos yields around 15,000 videos.

Invezz previously reported that at least two U.S. state attorneys sought more information from the company on privacy-related accusations.

Zoom-bombing refers to the situation where malicious actors are entering Zoom calls and disrupting them by screen-sharing offensive imagery.

In the meantime, Credit Suisse analyst Brad Zelnick cut Zoom stock rating from neutral to underperform today, but with a price target upgraded from $95 to $105.

The key reason behind the downgrade, according to Zelnick, is the fact that the stock trades at 40 times consensus estimates for 2020 revenue.

Technical analysis: Stock price approaching buy zone

Following today’s pullback, Zoom stock price has now retreated around 35% from the record highs, set two weeks ago. Since the market opened, shares of Zoom have managed to recover around half of their losses from the pre market trading session.

Today’s low comes very near the key horizontal support at $107.38, where we can expect a significant buying interest to appear. On the upside, the zone around $135 can generate another round of selling interest.

Summary

Shares of Zoom have opened the new week more than 11% lower after new reports emerged concerning the lack of privacy and safety surrounding Zoom’s video app. Moreover, Credit Suisse analyst downgraded the stock to underperform, with a stock price target of $105.