MagicJack Surges After First Operating Profit Since 1996Leslie Picker
MagicJack VocalTec Ltd. surged to a three-month high in New York after the Israeli company whose founders pioneered voice-over-Internet technology posted the first annual operating profit since its 1996 listing.
Shares of MagicJack jumped 5.7 percent to $15.80 by 1:08 p.m., the highest level since Jan. 8, after earlier rallying as much as 15 percent. Trading volume was more than five times the daily average over the past three months, data compiled by Bloomberg show. MagicJack was the biggest gainer on the Bloomberg Israel-US Equity Index of the largest Israeli companies traded in New York, which fell 0.9 percent to 89.20.
Operating income for Netanya, Israel-based MagicJack was $43.6 million last year, compared with a loss of $4.6 million for 2011, the company said in a statement released after U.S. markets closed yesterday. Net revenue, which MagicJack defines as net of returns and allowances, was $158.4 million, up 43 percent from a year ago, said the company, whose products allow phone calls to be made over the Internet.
“Clearly demand for this technology has been increasing,” Fran Caulfield, research director at Mountain Lakes, New Jersey-based Insight Research Corp., which focuses on telecommunications companies, said by phone. “We will still see, at least in the short term, these kinds of growth rates are possible.”
MagicJack shares have slumped 40 percent from a September high and 59 percent of its tradeable stock was sold short by investors as of the March 15 settlement date. That’s the highest short interest percentage among all companies on the Nasdaq Composite Index, data compiled by Bloomberg show.