MagicJack shares up on new CEO
WEST PALM BEACH, Fla. (AP) — MagicJack VocalTec Ltd. shares jumped Friday after the internet phone company named a new CEO and issued a strong forecast.
THE SPARK: The company said Friday that it has named board member Gerald Vento as its president and CEO. The company's current CEO Daniel Borislow, who created magicJack, said it was time to hand over the reins to someone else to grow the business.
MagicJack also said that it expects fourth-quarter operating income of more than 70 cents per share and revenue of more than $39 million. It said its 2012 results will exceed expectations based on lower costs and improved sales.
The company previously said in September it expected fourth-quarter operating income of more than 50 cents per share.
THE BIG PICTURE: MagicJack inventor Borislow was appointed as CEO in 2010. He said in a call with analysts that he will continue to work with the company on certain product lines and marketing.
Vento will take on his new duties Jan. 1. He is the founder of the wireless services company TeleCorp PCS. He has been a director at magicJack since 2008 and became chairman of its board in April. Vento will take on his new duties Jan. 1. Board member Donald Burns, also an experienced public telecom company founder and CEO, will assume the role of chairman of the board.
Borislow said Vento and Burns are the best leaders to maximize shareholder value.
"I am more of a startup and invention guy; Jerry and Don have the ability and the track record running successful public companies," Borislow said in a statement. "The company is fortunate to have the perfect person for the CEO job, someone who has been part of our growth strategy since 2008."
MagicJack is headquartered in Israel with its U.S. offices in West Palm Beach, Fla.
SHARE ACTION: Shares jumped nearly 9 percent to $17.72 in afternoon trading. Its shares have traded between $12.98 and $28.22 in the past 52 weeks.