Commtouch(CTCH): Reverse Split Should Help
Written by: Aaron Katsman | December 17, 2007
Aaron Katsman
www.IsraelNewsletter.com
Commtouch(CTCH), a leading provider of email defense systems, announced today that all proposals presented to shareholders on its proxy statement for the annual meeting of shareholders held on December 14, 2007 were overwhelmingly approved, including the reverse stock split (by over 92% of the voting shares).
I guess the question is whether this is good, bad, or insignificant news? While in some cases reverse splits signal that a company is at the end of the line, in Commtouch’scase that is not the case. The company continues to execute it’s business model well, and as more and more defense is needed to stop the spammers, Commtouch should continue to grow. They made this move in order to reduce the number of shares, as well as get the share price up over $5, where it’s open to more institutional interest.
It seems that this is a positive move and the fact that over 90% of the votes were in favor is a good sign. But what’s really important is that they continue to sign deals and execute. If they do that the stock will take care of itself.
Disclosure: Author’s fund holds a position in CTCH and is long the stock as of 12/17/07.
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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
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