magicJack Shares Popped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of magicJack VocalTec (NAS: CALL) jumped 10% today on extremely high volume.
So what: Just over halfway through the trading day, more than 300,000 shares had traded hands, compared to a 30-day average of 68,000. First of all, the company paid a dividend in stock today, essentially splitting shares, so the stock is trading lower than it was Friday. It was also reported late last week that management has canceled the share sale it announced earlier this month.
Now what: Splits and dividends can result in some big moves, but I think investors are still pushing shares higher on relief that the share offering has been canceled. Shares had taken a tumble prior to the announcement and are now bouncing back to where they were prior to the offering announcement. I'm not buying the move today, but once shares settle down it may be worth taking a fresh look at the company's valuation considering its large cash load.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.