WorldGate Communications Inc. stock gained 24% in heavy trading Monday, closing at $5.50 per share.
It’s not clear what’s driving the run on shares in WorldGate, which transformed into a company focused on developing videophones last year after pulling out of the interactive-TV business.
More than 6.3 million WorldGate shares were traded Monday. That’s about 20 times the stock’s average daily volume. The stock has risen steadily on heavy volume since the end of November.
WorldGate has been pitching cable operators and other firms its new “Ojo” videophone. The company has a distribution deal with Motorola Inc. for the product, and WorldGate and Motorola plan to show it off early next month at the Consumer Electronics Show in Las Vegas.
The Bellwether Report issued an alert Monday regarding WorldGate’s stock jump, noting that there was “very little concrete evidence to justify their current market correction.”
Officials at WorldGate and Motorola didn’t return calls Monday.
WorldGate CEO Hal Krisbergh gave an interview on WallSt.net (www.wallst.net) last week, telling a reporter that the company planned to begin shipping the Ojo phone during the first quarter.
When asked to give investors a pitch for WorldGate’s stock, Krisbergh told WallSt.net, “Rarely does one see an opportunity with this much potential.”
WorldGate rode the dot-com bubble in the late 1990s, and its stock traded at around $50 per share in 1999. But the stock tanked after WorldGate failed to gain cable distribution, falling to below $1 each by September 2002 and not rising above $1 until November 2003.