MagicJack Surges as CEO Says Departure to Cut Shorts
MagicJack VocalTec Ltd. (CALL) rallied the most in 10 weeks in New York after Chief Executive Office Daniel Borislow resigned, saying he hopes his departure will curb short-selling that contributed to a three-month slump in the Israeli technology company.
Shares of the Netanya, Israel-based company that offers voice-over-Internet services jumped 10 percent to $17.95 at the close of trading on volume that was four times the three-month daily average, according to data compiled by Bloomberg. Shares have plunged 33 percent since Sept. 12.
Borislow will concentrate on marketing and product development, relinquishing the post of CEO on Jan. 1 to Gerald Vento, the company said in a statement today. Vento was chief executive of TeleCorp PCS Inc., which was sold to AT&T Inc. (T) in 2002, MagicJack said.
“Short sellers aren’t going to have the excuse of Dan Borislow anymore,” the CEO and founder of MagicJack, said in a call with investors today. “We’re turning the company over to a seasoned veteran who knows how to build a company.”
Short sellers have increased bearish bets on MagicJack to a record. Wagers against the stock have jumped tenfold to 12 percent of shares outstanding this year, according to data compiled by Bloomberg and Markit, a London-based research firm.
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