On Tuesday, shareholders of Zoom Video Communications Inc slapped the company with a class action suit. They accused the video conferencing app of overstating its privacy standards and hiding that its service was not end-to-end encrypted.
A petition was filed against the company by shareholder Michael Drieu that a string of recent media reports highlighting the privacy flaws in Zoom’s application have led to the company’s stock. In the beginning of the year, it had rallied for several days to plummet.
On Tuesday, the shares of the company came down to 7.5% at $113.75. Since late March, the company has lost nearly a third of their market value. Eric Yuan, the Chief Executive Officer of the company apologized to users and asserted the company had fallen short of the community’s privacy and security expectations, and was taking steps to fix the issues.
Millions of new users have signed up for the application after many are forced to work from home after lockdowns were imposed to slow down the spread of the coronavirus. The lack of end-to-end encryption of meeting sessions have made the users worried who have heavily criticized the company.
Recently, Elon Musk, the boss of SpaceX, has banned its employees from using Zoom, citing “significant privacy and security concerns.” Taiwan’s cabinet has told government agencies to stop using the app.