
The SEC Wants Investors to Stop Buying the Wrong Zoom Stock – Nasdaq - cmehdy
https://www.nasdaq.com/articles/the-sec-really-wants-investors-to-stop-buying-the-wrong-zoom-stock-2020-03-27
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newdude116
Fun fact: Buddy of mine wanted to buy Petrobras, a Brazilian oil company. By
mistake he bought a company with a similar name, that was basically an
electricity provider in Argentina. In the end it ended up a better investment.
:-)

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mandeepj
If you are n't paying attention then you will pay ignorant tax by buying the
wrong ticker. Although, in short term, it might make you good ROI.

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thaumasiotes
Matt Levine had a fun observation about the whole mess (
[https://www.bloomberg.com/opinion/articles/2020-03-26/nobody...](https://www.bloomberg.com/opinion/articles/2020-03-26/nobody-
wants-a-margin-call-right-now) )

> I hope you didn’t get too clever about this. For instance, if you noticed
> that everyone was buying the wrong Zoom and decided to profit from their
> stupidity by selling ZOOM short, then (1) you have done poorly (ZOOM is up
> almost 900% year to date) and (2) now you might not be able to close out
> your short.

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vikramkr
You usually have to post margin daily so you might have been priced out by now

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throwaway724
This also happened with a piece of shit OTC Facebook app developer called SNAP
Interactive when Snapchat was going IPO. I met their CEO at a conference in
NYC, and he literally had business cards printed out touting how high their
market cap got during this and their subsequent message board pumping.

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dan-robertson
Other common examples are COKE (who don’t make Coca Cola) and HP (who don’t
make computers).

In some Asian markets they use numbers for tickets (and some people invest
based on superstitions about those numbers)

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ajross
Your rational efficient market at work. Good grief.

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mardifoufs
Rational/efficient markets don't mean no irrational players. It just means
that those players get punished for their irrationality, which is exactly what
happened here. If anything efficient markets hypothesis is based on the fact
that low/bad information is penalized which in turn makes markets more
efficient ;)

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vikramkr
Technically everyone can be rational if their utility curve is optimized by
buying the wrong zoom

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mardifoufs
Yep! I think Matt Levine talked about that recently. Though to be honest,
speculating on an almost "fake" stock isn't exactly rational (from the
perspective of an individual market participant) because there is no way to
even try to optimize the utility curve.

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vikramkr
Unless you find it fun to gamble. Risk seeking utility curve

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mardifoufs
Ah! But we already have SPY options if you want your fix of purely degenerate
gambling. I won't disagree that it's super fun! ;)

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vikramkr
Some of my professors would include tesla in that list haha. To each their
own!

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fortran77
Is it really up to the SEC to do this? It sets a precedent. Now will they be
liable if they don't warn people about other companies with similar names?
With 3 and 4 letter tickers, many companies are 1 letter off.

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mardifoufs
ZOOM has not filled anything to the SEC for 5 years now. It's a dead chinese
zombie shell corporation so this is more akin to keeping the stock exchanges
clean of junk. Especially since that junk only exists to harm.

COKE is routinely mistaken for Coca Cola, but the SEC doesn't intervene
because COKE is a real operating company. So I think this is not a sign of
overreach from the SEC.

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brockwhittaker
COKE is not only a real thing, they’re also involved in bottling Coca Cola, so
while they’re not financially the same company, they are inextricably related.

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roywiggins
Robinhood is _still_ advertising COKE, which is not the Coca-Cola Co.

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kds3
Why do they call them _investors_? People who haven't even briefly read
financial filings for the company they are going to buy? They are called
speculators, not investors.

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kylec
This seems a bit silly - if people can’t make sure they’re buying the right
stock, maybe they should bear the consequences of that. Caveat emptor.

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hatmatrix
Why is nasdaq.com advertising for Motley Fool?

