Elon Musk’s SpaceX Bans Zoom Due to Security Concerns

Remote interactions via videoconferencing technology is obviously on the rise in this new normal of social distancing, which is putting companies like Zoom in the forefront. However, as more businesses utilize videoconferencing capabilities to conduct meetings, it puts these companies under the proverbial microscope—and as Elon Musks’s company SpaceX is finding out, Zoom’s videoconferencing app doesn’t come without its share of security issues.

SpaceX cited “significant privacy and security concerns” with respect to using the Zoom app. This comes of course as Zoom’s app has experienced a serendipitous rise in use thanks to the coronavirus outbreak.

In an email sent out to employees on March 28, SpaceX officially banned the use of the Zoom app. The ban comes after the Federal Bureau of Investigation’s Boston office recently issued a warning that the videoconferencing app experienced two incidents in which unidentified individuals invaded school sessions. This even spurred its own moniker of  “Zoombombing.”

Zoom was quick to do damage control following the incidents in a blog post.

“In light of recent interest in our encryption practices, we want to start by apologizing for the confusion we have caused by incorrectly suggesting that Zoom meetings were capable of using end-to-end encryption,” the post said. “Zoom has always strived to use encryption to protect content in as many scenarios as possible, and in that spirit, we used the term end-to-end encryption. While we never intended to deceive any of our customers, we recognize that there is a discrepancy between the commonly accepted definition of end-to-end encryption and how we were using it. This blog is intended to rectify that discrepancy and clarify exactly how we encrypt the content that moves across our network.”

Zoom’s share price fell 11% in Thursday’s trading session, which should put exchange-traded funds (ETFs) on watch with significant exposure to the company. For investors looking at ETFs that have exposure to Zoom, they can start with a technology and e-commerce-focused fund like the Kevin O’Leary-sponsored Global Internet Giants ETF (OGIG)—OGIG debuted in the markets in June 2018 and has been offering investors access to a wide variety of both domestic and international stocks.

Another fund to check out is the WisdomTree Cloud Computing Fund (WCLD), which also has Zoom exposure. WCLD seeks to track the price and yield performance of the BVP Nasdaq Emerging Cloud Index, which is designed to track the performance of emerging public companies primarily involved in providing cloud computing software and services to their customers.

For more market trends, visit ETF Trends.