Products Fuel Smith Micro Gains
Stock in Smith Micro Software Inc. continued to fly Thursday, propelled by news of two new products connecting cellular telephone users to the Internet.
The Aliso Viejo company’s shares, which traded around $4 each for several months, started taking off last Thursday after Smith Micro said it had created a new wireless and broadband division. The price then went as high as $8.13 a share.
Back-to-back product announcements in the past two days have sent shares soaring--especially on Thursday when the stock leaped 120% to $23 a share during Thursday’s trading before backing off to close at $21.06 a share. Still the stock doubled--gaining $10.63--to make it the 16th biggest hike in U.S. markets.
Since the start of the year, the stock value has risen nearly eightfold.
The latest surge started Wednesday when Smith Micro said its Internet solutions unit had released Wireless WebDNA, which lets users access and shop electronic commerce sites with their cell phones. The stock gained $4.31 a share to close at $10.44.
The company’s wireless and broadband division followed up Thursday with a press release introducing QuickLink Mobile 2000, which the company says allows digital cell phone users to establish a wireless PC data connection to the Internet. Almost 21 million shares traded hands, more than 20 times the average daily volume over the past three months, making it the 9th most active stock on Wall Street.
This week’s product announcements are fruits of an 18-month-long company make-over, said Robert Scheussler, the company’s chief operating officer.
Smith Micro’s central business two years ago was software for using analog modems, a technology that is now outdated.
“A lot of people had the impression that’s all we are and that’s all we had,” Scheussler said.
The dramatic rise in the company’s market capitalization in recent days shows investors have recognized the company has risen to the challenge of new technologies, he said.
Smith Micro’s new course involved heavy investment in research and development and acquisitions to help it enter the digital, Internet-driven future, Scheussler said.
The company hopes the products released this week will help propel it forward by reaching into two hot wireless markets: e-commerce and enhanced productivity for the traveling user.
Owners of certain cell phones can access online stores that use Smith Micro’s Wireless WebDNA software, as well as the company’s Web catalog, Scheussler said.
QuickLink Mobile 2000 software for personal computers allows travelers to use their cell phones as modems for their laptops, letting them make a digital connection to their service provider from anywhere on the road.
“We expect the Internet solutions and wireless and broadband units to both be major contributors to revenue and profitability,’ Scheussler said.
Smith Micro posted an operating loss of 6 cents a share on revenue of $2.5 million in the fourth quarter. For the year-earlier period, the company recorded a loss of 5 cents a share on revenue of $2.7 million, according to restated figures that include the results of Pacific Coast Software, which Smith Micro acquired in September.
