Vonage shares were on a blend of methamphetamine and acid today, gaining an obscene 165 percent in a single session and reminding us all of the late 1990s when this type of thing was as commonplace as active venture capitalists.
But this isn’t the late 1990s, and the Vonage surge can’t last unless there are good reasons for it — and there aren’t.
Vonage was forced to issue a statement tonight to shed light on the share-price madness. Not much light was shed.
Three weeks ago, the company announced financial results which included record adjusted EBITDA of $31 million, positive net income for the first time in the company’s history and positive cash flow. Last week, the company launched Vonage World which provides flat rate unlimited calling to over 60 countries with unlimited readable voicemail (visual voicemail). Initial interest has been strong. Additionally, the company previously announced that it expects to enter the mobile applications market, which has garnered a great deal of attention in recent weeks and months.”
That’s not nearly enough to justify what we’ve seen today, nor is it sufficient explanation for the stock’s gain of more than 300 percent in the last six trading session. Either there’s more to the story than Vonage is presenting — and I don’t think there is — or the stock has been possessed by a dark speculative spirit of unknown provenance.
The exorcist might be called overnight, though, and we could see Vonage shares trading sharply lower tomorrow.