VocalTec Acquires Outsmart: Major Event that Could Significantly Increase the Share Price

Posted on December 10, 2009

Today, VocalTec announced that it acquired Outsmart, an Israeli provider of mobile VOIP solutions. Strangely, the company has not announced the financial terms of the deal, but my suspicion is that VOCL got a tremendous bargain, since Outsmart was a busted venture capital (VC) investment, and it’s likely the VC’s just wanted out while maintaining some upside opportunity via shares in VOCL. Hopefully, management will release additional financial details on the deal in the coming weeks or at least next quarter. Outsmart has raised well in excess of $17 million in VC capital, so if VOCL bought it for anything less than that the deal is stellar.

More importantly, as readers know based on my Vonage (VG) posts, I am extremely bullish on the prospects for mobile VOIP. With the acquisition of Outsmart, VOCL has positioned itself with an incredible portfolio of products for mobile VOIP. The market potential of these products is enormous, and the timing couldn’t be better, since mobile VOIP is going to explode in the next few years. As a leading and well recognized leader in the field of VOIP, VOCL can now participate in the coming growth of mobile VOIP.

With a market cap of only about $10 million and sales already at nearly $8 million annualized, the upside for VOCL’s shares seems significant, if my analysis of the Outsmart deal proves somewhat accurate.

Disclosure: Affiliates of Envoy Global Research, and its principals, own shares in VOCL. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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This site may include market analysis and we may own shares in the stocks mentioned in our reports. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.