Wednesday, December 21, 2005

VocalTec Stock is On Fire - Why???

VocalTec is widely regarded as the pioneer VoIP vendor. They've outlasted scores of VoIP companies, but have never really capitalized on being first in the game. Lots of companies with much shorter histories have had good runs and made successful exits, but this has all but eluded VocalTec.

Their slide this year has been well documented, as has their recent acquisition by another Israeli IP vendor, Tdsoft. A 1 for 13 reverse stock split was announced Nov 28, and the price quickly weakened from there. Many had left VocalTec for dead, even before tying up with Tdsoft.

There has been no public news on their activities, and the blogs have been quiet. Tdsoft is not a household name in VoIP, and it's hard to see what they could make from what was left of VocalTec.

I'm not a stock watcher, but VocalTec's run in the past few days has been astounding. Something must be up besides the stock price.

The stock price was under $6 late last week, and is now just shy of $13. As of 10:30 this morning, it's up 28% alone today.

Frankly, I can't begin to speculate why this is happening, but it certainly is not what one would have expected. Can't say it's market froth since the same is not happening with other IP stocks, even with Vonage getting another round of funding this week.

Anyone out there with a clue who cares to share their thoughts about this on my blog, feel free to do so. Otherwise, I'm sure the real story will emerge soon.

3 comments:

ipcom said...

Posted by: Readsalot_99

My guess for rapid movement of stock is two-fold:

1. few shares available for trading.

2. Not only is financing arranged, but maybe some deals to be announced soon. DT could be a buyer of product and Lucent could be the other buyer. VocalTec was in something like 17 trials for the Essentra product but couldn't close the deals beacause of size, Lucent as a user/distributor doesn't have problem with size. As was mention sometime ago TD felt business would come from DT after the merger.

Only opinions and speculations, but they sound right to me.

ipcom said...

Posted by: Jonty

I fully agree with Readsalot_99. However, there may be another reason - Vonage! Why? Many are speculating that Vonage is getting all the funding as it could be bought up at a hefty price soon. The other speculation is that bigger VoIP companies are thinking to acquire smaller VoIP cos. VoIP has a great future, so the rise. I won't be surprised to see other VoIP stocks rising. It happened to IT companies (and even rogue old economy companies who declared that they were 'going software') just before the dot com bubble burst. With 11000+ players and so much hype, VoIP is also a bubble, it is going to burst soon. Rise in the VocalTech stocks are symptomatic of the inevitable.

ipcom said...

Posted by: Readsalot_99

Granted anything can and probably will happen, however, I wonder if VoIP is really suffering from the final stages of a bubble syndrome when its day is still ahead. It really has not got off the ground yet, if all voice, media, etc ends up being packetized.

regards, reads/Vonage wanted 140 million from the Hedge funds, they force Vonage to take 250 million...shows some hedge funds are bullish on VoIP....