The revenue compares to $30.8 million with income of $1.8 million a year ago.

magicJack had a cash balance of $49.0 million and 23,076,112 shares outstanding at the end of the first quarter 2011 and noted: “Comparing first quarter 2011 cash balances to first quarter 2012 saw an increase of $11.5 million even after the Company bought back over 2 million shares in this time frame.”

The Company hopes to reach the upper limits of its previous expectations of 20% to 30% annual revenue growth in 2012 and also $1.25 to $1.50 in earnings per share.  Thomson Reuters has estimates of $1.14 EPS and $153.46 million in sales, but we would note that there are too few analysts to really count as a ‘consensus’ in normal stocks.

magicJack shares are indicated up 4% at $21.75 and the 52-week trading range is $9.49 to $28.22.

JON C. OGG

Even if you back out the adjusted figures, the net income was $0.09 EPS or $22 million versus a $1 million net loss a year ago.  The VoIP telephony outfit has managed to keep its costs from rising, and it is projecting that its gross subscriber line additions will grow in 2011 and that it should have $165 million in reported EBITDA.

Along with revenues, there are still some concerns that need to be addressed.  The ARPU, or average revenue per user, came down to $30.14 from $30.71 in year-ago quarter.  The company’s gross line additions came to 158,000, but the net came to a loss of 11,000 lines as the churn increased to 2.5%.  This is too high of a churn.  The company sees 2011 churn in the “mid two percent range.”  Vonage ended with 2,397,660 subscriber lines at June 30.

Marketing costs are also higher, another concern.  This was $52 million versus $49 million a year ago and sequentially.  The key measure of subscriber line acquisition costs also ticked higher to $330 from $318 a year ago and from $282 sequentially.

Microsoft Corporation (NASDAQ: MSFT) has become the number one problem here.  The acquisition of Skype is THE biggest pressure.  The threat from Google Inc. (NASDAQ: GOOG) and its free inter-call features is one thing, but unleashing Microsoft on the domestic and global phone market is much more concerning with the Facebook integration that if Skype had just gone public and struck its own deals.  Skype had an average of 145 million connected users per month in the fourth quarter of 2010.

VocalTec Communications Ltd. (NASDAQ: CALL) continues to be a threat as well with its magicJack low-cost phone line service, which has sold more than seven million magicJack device since the launch in 2008.

8×8 Inc. (NASDAQ: EGHT) remains a competitor in VoIP, but the reality is that this $32 million market value is just not in the same league even if it claims more than 25,000 businesses using its VoIP, video conferencing, and unified communications services.

The gain is that Vonage’s operating expenses came down by a factor of 7% in the quarter.  The cost per line was cut to $8.03, down from $8.34 sequentially and down from $8.72 a year earlier.  Another boost may come with some mixed results at first but should pay off.  The company is effectively doubling its store distribution channel to 6,000 spots.  That will raise costs but will help to boost sales, at least it would seem to be the case.

Another boost is coming from a debt refinancing.  It has cut what appears to be some $43 million annually due to a LIBOR-plus-3.50% pact.  That is a saving which makes up for many losses elsewhere.

Along with a retail distribution expansion, the company has launched its global pay-per-call application for the iPhone as well.  That means that as long as you can get a wireless connection, you can use your iPhone whether your phone can travel and be carrier-compatible globally or not.

Vonage shares are up 1% after an hour of trading at $3.75 after having hit $3.88 earlier today. The 52-week trading range is $1.92 to $5.39, and the stock was down almost 30% since its report in early May.  The market cap is now $830 million.

The report was taken as a positive one despite some obvious concerns.  Now the company just has to worry about an eight-day losing streak turning into nine days, as well as that heavy competition.

JON C. OGG

Google Inc. (NASDAQ: GOOG) and Facebook would be the first losers here.  Cisco Systems, Inc. (NASDAQ: CSCO) has already been under fire from many angles, but it has its Telepresence efforts and it owns WebEx and bought Tandberg for its web communications.  This s just one more established strong competitor for Cisco.  Citrix Systems, Inc. (NASDAQ: CTXS) also owns GoToMeeting, and you can argue that this drives the value up for GoToMeeting or you can argue that it is just one more competitive threat.

eBay Inc. (NASDAQ: is the immediate winner here in this Skype-Microsoft tie-up.  eBay is still a partial owner of close to 30% of Skype after selling its majority interest.  $8.5 billion is much higher than what the IPO value was going to be, and now eBay can realize an instant win here.  In effect it will have sold Skype twice if you think about it.  Shares are up about 4% at $34.45 pre-market.

Premiere Global Services, Inc. (NYSE: PGI) has now shed its old legacy fax business via PGiSend. The company brings together more than 15 million people in nearly 4 million virtual meetings each month. It also recently launched its new iMeet.com site for these meetings and the video compression for live meetings is incredible.  Its most recent quarterly revenues were up almost 4% to $116.9 million and the company is both profitable and trades like a value stock.

VocalTec Communications Ltd. (NASDAQ: CALL) is one that is hard to say will be a direct winner based upon a “valuation boost” but the company did turn out to be a huge win for those who bought shares upon the announcement that it was acquiring magicJack that you see advertised as the dirt-cheap phone service on TV commercials.  It has sold over seven million magicJacks and recently gave guidance for its first quarter of $30.9 million and approximately $0.22 EPS.

Vonage Holdings Corporation (NYSE: VG) was hit last week after earnings and shares dipped back under $5.00.  Its income from operations increased to $30 million from $25 million in the year ago quarter although revenue was down marginally to $220 million.  Subscriber lines are not really growing, but it listed some 2,408,228 subscriber lines at the end of the quarter.

RADVision Ltd. (NASDAQ: RVSN) and Polycom, Inc. (NASDAQ: PLCM) are two other players for video conferencing and they might be able to claim higher relative valuation as a result.  The problem is that higher valuation here might be counteracted by tighter competition and further sector lock-out as a result.

This Skype-Microsoft deal may act as a lesson learned for Facebook and its super-young management team… Until Facebook goes public, you will continue to not be able to adequately fight these other buyouts if you want to chase them.

You can join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

The CEO gave several key bits of data looking back and looking forward into 2010.  Some figures include the following:
Net line additions of 6,000, the first quarter of positive net line additions in more than two years; the Churn will be 2.4% and that is the lowest fourth quarter churn in four years; Gross line additions will increase sequentially to 167,000; and EBITDA is expected to be in the $40 million range.

The company also will discuss continued progress penetrating international calling markets and building customer loyalty with its Vonage World plan for unlimited calls to more than 60 countries for one flat rate.  With expectations of strong cash flow and a better balance sheet, the following projections are being made for 2011:

• expects gross line additions above 2010 with positive net line additions in 2011;
• 2011 churn is expected to be stable with fourth quarter 2010 levels;
• current initiatives will begin to meaningfully impact revenue growth during the second half of 2011;
• and continued EBITDA growth in 2011.

Some of these figures seem rather small on the surface.  Apparently the gains are more than enough for the Vonage bulls as shares are higher.  The stock is trading up 6.5% at $2.45 on nearly 400,000 shares right before the market opens.  The 52-week range is $1.30 to $2.79.  Vonage’s market cap is $489 million as of the $2.30 close on Tuesday.

Investors may also want to watch shares of VocalTec Communications Ltd. (NASDAQ: CALL) for a secondary move if Vonage shares remain high like this.  VocalTec now has the magicJack low-cost VoIP telephone offering you have seen advertised so much on TV.  At $24.11, its 52-week range is $1.20 to $39.88 on a split-adjusted basis.

JON C. OGG

We have compiled information on the catalyst for each stock, an outlook where applicable, added in color for traders where applicable and given specific news and background data on each situation.

Barnes & Noble, Inc. (NYSE: BKS) is turning into a nasty proxy fight as billionaire Ron Burkle is appealing a poison pill anti-takeover measure from the company as his 18.8% stake (second highest behind Riggio) as he is trying to install 3 directors next month.  Here is the obvious… Burkle needs to either cry uncle or he needs to go split a fifth of scotch after a round of golf with Riggio and they can work out a fair price.  Being an activist in a closely held company is not the smartest of targets, even for billionaires.  Friday’s CALL options trading was “off the charts.”

Brocade Communications Systems, Inc. (NASDAQ: BRCD) was one of this week’s “stocks that could double” that we prepared for InvestorPlace.com.  The current catalyst is the post-3PAR interest after HP beat out Dell as the companies fight for more unified offerings between networking and storage now that Cisco has declared war on that lineup of billions in revenues.  This highlights Brocade now that it has merged with Foundry and sets this up t be the low-cost provider or “the poor man’s Cisco” for Dell, HP, IBM, or a whole host of other companies that need to fend off the Cisco threat.  With a $2.5 billion market cap, its market cap is now only 25% more than 3PAR and it is expected to have about 9-times the equivalent revenues (almost $2.1 billion) for the year as a standalone player.  If the tech consolidation continues, this is a highly viable candidate for a buyer to compete against Cisco on price.  The company’s big problem is that on a standalone basis it just can’t stand up to much of the larger competition and that gives it very choppy results.

China Sky One Medical, Inc. (NASDAQ: CSKI) got crushed after lowering guidance due to: “Management’s reduced guidance reflects the termination of relationships with certain private distributors, who after several rounds of discussions, chose to end their cooperation with the Company after learning that their business information was disclosed in the Company’s public SEC filings and would continue to be disclosed in such documents as required by SEC regulations… has led to increased scrutiny of their financial performance by government authorities within China. “  The integrated Chinese pharma player lowered 2010 revenue guidance to $128 to $136 million versus a prior target of $160 to $164 million; lowered 2010 adjusted net income guidance to $26 to $31 million from $40 to $41 million.  China Sky One became China Die One as shares fell a sharp 27.76% to $7.00 in the after-hours session on a sharp 187,000 shares after the 4PM bell.  This marks a 52-week low under the prior range of $8.82 to $25.45. Ouch.

CIENA Corp. (NASDAQ: CIEN) is on deck for earnings on Wednesday morning.  The communications equipment and systems company is at $13.29 and the 52-week range is $10.53 to $19.48.  A portfolio manager just labeled it as a new technology providing long-term value for investors.  Thomson Reuters has estimates of -$0.33 EPS and $387.04 million in revenues.

First Niagara Financial Group Inc. (NASDAQ: FNFG) is something that just does not make sense at the current time.  The bank is acquiring New Alliance Bancshares Inc. (NYSE: NAL) and this will set it up to be the next potential super-regional bank.  Shares hit yet another 52-week low of $11.23 this last week before closing out the week at $11.80 versus a 52-week range of $11.23 to $14.88.  On a forward earnings basis, its multiples are neither dirt cheap nor excessive.  What is a mystery is that the Attorney General from Connecticut is probing this merger.  New Alliance trades at an implied discount to the 1.1 shares, but the arbitrage is harder to play because the merger may be stock or it could be cash and stock.  Our angle here is on First Niagra, as it has been a safer bank that does not have all of the same baggage as many of the other big boys.  Even with the concern of CT-state charters versus Federal charters, the AG probe just doesn’t make much real sense.

Genzyme Corporation (NASDAQ: GENZ) closed down 0.44% at $70.49 and is still above the $69.00 implied buyout price from Sanofi-Aventis (NYSE: SNY).  Reports from both Bloomberg and IBD indicate that CEO Henri Termeer may be close to capitulating and accepting a buyout.  Our guess is that Termeer is probably telling them, “Please just offer $1 or $2 more so we look good to our holders who are stuck in Genzyme at slightly higher prices.”  This saga may soon come to an end.  After all, Sanofi has bragged over and over that it has the cash.  It can afford another buck, or two, if it wants.

The official Google blog explains this in detail.  Frankly it is a lot like the free version of Skype, soon to be its own public company now that eBay Inc. (NASDAQ: EBAY) sold off a majority stake.  This won’t be a true category killer to AT&T Inc. (NYSE: T) nor to Verizon Communications Inc. (NYSE: VZ).  It will, however, be just one more thorn in the side of the owners of the cell towers and the owners of all that copper wire around the U.S.

Google notes, “Calls to the U.S. and Canada will be free for at least the rest of the year and calls to other countries will be billed at our very low rates. We worked hard to make these rates really cheap (see comparison table) with calls to the U.K., France, Germany, China, Japan—and many more countries—for as little as $0.02 per minute.”

Skype is definitely a focus here.  But so are two companies that offer internet telephony for very low prices: Vonage Holdings Corporation (NYSE: VG) is the first; VocalTec Communications, Inc. (NASDAQ: CALL) now that it acquired the owner of the majicJack, the other very inexpensive phone service alternative.

Google has found yet one more industry it can disrupt.  Maybe it will consider making electric cars or staffing dry-cleaners next.

JON C. OGG

In addition to The Unusual Suspects, we have several key issues to consider.  On Friday, there were many large cap stocks hitting 52-week lows and many of these looked and felt counter-intuitive on the surface.  There were also billions of dollars in new share buyback plans announced this last week on top of many buyback updates and expansions.

Apollo Group Inc. (NASDAQ: APOL) has been battered along with all for-profit education stocks due to reimbursement rate, recruiting tactics, post-graduate expectation reality checks, student loan default rates and more.  Apollo has also experienced SEC issues.  Despite an Asensio report slamming it Friday, Apollo actually closed up on a down day Friday and the company appears to have passed the criteria set in the initial regulatory tests.  This was one of the 5 options trades in the sector we wrote about for Investorplace.com as outlier bets for potential exponential returns (low premiums for out of the money calls) if the regulatory pressure eases even a fraction that could lead to an upside surge in share prices.

AU Optronics Corp (NYSE: AUO) is getting press it does not want.  The Taiwanese maker of thin film LCDs had its CEO indicted over price fixing in June, but this last week CEO Lai-Juh Chen was ordered to surrender his passport this week so he cannot leave the country.  At $9.02, the ADRs 52-week trading range is $8.68 to $13.30.

Barnes & Noble, Inc. (NYSE: BKS) reports earnings this coming Tuesday.  Shares were at $12.84 before it put itself up for sale, and they popped to $15.31 the next day in early August.  The high was $16.74 since then but shares closed at $15.53 on Friday. A proxy situation and earnings will make the sale process a key focus here this coming week.  With a $914 million market cap and a 52-week trading range of $11.89 to $25.07, the big question comes down to what it can fetch or if it can fetch a bid.  RadioShack ran into troubles in selling its brick and mortar retail system, so the question is if a book brick and mortar player can compete against Amazon and Apple in the future.

BHP Billiton plc (NYSE: BHP) reports earnings on Wednesday.  The company’s offer for Potash Corp. of Saskatchewan (NYSE: POT) is what everyone will be focusing on.  The belief by many is that the now hostile tender will need to to $160 per share or higher.  The CEO’s payday will be one of the larger paydays in history if this occurs.  Investors will be looking very closely for the merger details and US investors are unlikely to pay attention to BHP’s actual earnings report.

BP plc (NYSE: BP) may have been out of the spotlight over the last three weeks now that its top-kill well blockage seems to have worked.  This coming Wednesday it may be in the news again as the President’s commission on the BP oil spill meets.  At $36.40, BP shares are down over 10% from the highs after recovery.

Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX) saw shares fall 8.8% in the after-hours session down to $5.49 on over 60,000 shares in the after-hours session.  This one fell because it disclosed that the FDA is extending the review period by three months of its liver drug candidate called Acetadote.  Average volume is only about 100,000 shares and the market cap was a mere $123 million.  The prior 52-week trading range was $5.51 to $17.24, so if this holds it will mark a new 52-week low.

Fiserv, Inc. (NASDAQ: FISV) is one to watch ahead as this was the newest common stock addition from Berkshire Hathaway and Warren Buffett in the stock portfolio. Buffett bought a new position of 4.4 million shares of common stock during the second quarter and shares closed up over 3% week over week.  This one has now moved on to more investor radars and volume was lighter than you might have expected due to this being the slow days of August.  Berkshire’s full holdings are here.

Genzyme Corporation (NASDAQ: GENZ) may be running out of time or shareholder patience.  This Sanofi-Aventis offer has remained on the table with what is effectively nothing but silence.  Henri Termeer may be running short on investor patience here, even if this is obvious stalling to see if competing bids will come.  The due diligence here is the big risk he is taking.  If a company decides that Genzyme has continuing manufacturing woes and if Sanofi gets impatient, Genzyme could be reminded that there is a 15% hot-air premium in the shares.  Reuters says the silence may indicate talks are taking place.  Investors better hope that stance is right.

Jazz Pharmaceuticals, Inc. (NASDAQ: JAZZ) got crushed on Friday after the close.  It failed to win an FDA advisory panel backing for its fibromyalgia drug candidate.  Shares fell 28% to $7.05 versus a 52-week trading range of $6.01 to $13.95.  This one traded over 1 million shares in the after-hours on Friday so it will be very active on Monday.

Netflix Inc. (NASDAQ: NFLX) was listed as the #1 pole position chart in IBD this weekend, for the second week in a row. The week before saw a 12% gain but the stock actually closed down this last week.  Shares closed at $129.96 versus $132.26 the Friday before and versus a high print this last week of $140.90.  We don’t really agree that this represents solid strength, although the market weakness was a part and IBD has a history of years and years here.

Novell Inc. (NASDAQ: NOVL) has earnings on deck this coming Thursday and it recently trimmed its third quarter revenue range to $197 to $199 million versus prior guidance of $205 to $210 million. The company said its guidance reflects what it believes is customer uncertainty associated with Novell’s ongoing review of various alternatives to enhance stockholder value.  In short, that new hoped-for alternative buyout has not materially come about.  We predicted in May that the $5.75 buyout might need to be closer to $7.00 to secure the deal.  Shares are still at $5.81 and the 52-week trading range is $3.84 to $6.36.  One to watch for sure.

Symantec Corp. (NASDAQ: SYMC) is an ongoing stock to watch after the Intel-McAfee merger this week.  Symantec was in deep $%^& before the merger after it warned.  It just can’t ever get its act together.  Now there is a dual risk and opportunity ahead.  If Intel can convince PC makers that the McAfee bundle into hardware and into software is better than software alone, the Symantec could find its Norton anti-virus business getting ripped apart.  If Symantec can convince PC makers and device makers that it is now more important than ever to double-up on security providers then it has a huge opportunity.  The company’s history sort of, well it stinks.  This week’s gain was almost 12% to $13.80, which is the highest close since its $14.67 close before earnings and its earnings warning in late-July.

Tyco International Ltd. (NYSE: TYC) went through its big breakup in June of 2007, but Standard & Poor’s endorsed it all over again.  S&P is readmitting Tyco back into the S&P 500 Index.  Shares closed up 5.3% at $38.70 on more than triple-normal trading volume with more than 19.9 million shares trading hands.  The date it will be added is after the close on August 26 and we expect heavy trading volume to continue as indexers have to add in shares.  There are still millions of shares that need to be purchased going into the S&P 500 Index addition.

Vermillion, Inc. (NASDAQ: VRML) was a top active trader alert we asked “How long can a trend last?” because there had been 13 straight days of losses and was at $11.80 when the mudslide started.  It closed up 1.7% at $6.03 on Friday.  If this trend continues, Vermillion will have to change names to “Vermin.”  One day is no victory, but that is a concerning chart that should attract both bears and bargain hunters ahead.  Volume is still very low, but this is a new battleground stock that we won’t assign any upside or downside targets to.

VocalTec Communications, Inc. (NASDAQ: CALL) has been on fire and we want to revisit this one since our first alert one month ago.  When we saw that VocalTec merged with the owner of MagicJack, we could not help but to recognize the potential here even though it went through a reverse stock split.  That jumped to roughly $15.00 on the closure of the merger and it has steadily climbed higher and higher.  Shares closed at $38.00, which is close to 150% appreciation.  It keeps rallying because the CEO has been given permission to increase ownership to over 25% and there is even a share buyback of $12 million.  The company’s own investor relations site links to NASDAQ, which now says that the market cap of the combined companies after the share issuance is $445.9 million based on 11.736 million shares.  This one now trades at a multiple of revenue guidance rather than a discount to revenue guidance.  We can’t call for a short sale but those who are sitting on big gains should at least consider taking the cost basis out of the trade here so that you can still have upside and you leave assured returns in the name.

You can join our free daily email distribution list to hear more about dividend trends, analyst upgrades and downgrades, top day trader and active trader alerts, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

24/7 Wall St. will look at the Twitter posts at Reuters Biz, WSJ, Financial Times, CNN Money, MarketWatch, CNBC, and 24/7 Wall St. each day to see which stocks are most frequently mentioned. It is clear that in this area of social media these tweet are a sign of which companies the Twitter universe is interested in. These financial sites are followed by a combined 625,000 Twitter users which makes them a sizeable sample of Wall St.’s interests. In some cases, we will publish the actual tweets from the sites.

Among the most tweeted stocks on StockTwits are Baidu Inc (NASDAQ: BIDU), Netflix (NASDAQ: NFLX),  VocalTech Communications (NASDAQ: CALL), IMAX (NASDAQ: IMAX), Veeco Instruments (NASDAQ: VECO), Ford Motor (NYSE: F), A123 Systems (NASDAQ: AONE), and Deckers Outdoors (NASDAQ: DECK).

Reuters Biz: DuPont shares surge after profit nearly triples http://link.reuters.com/kuj79m

Reuters Biz: Europe banks seen raising significant capital: survey http://link.reuters.com/pyf79m

Reuters: Toyota expects next Prius model to be built in U.S. http://link.reuters.com/beb79m

FT: BP plans $30bn assets sale: Oil major plans to sell assets worth $30bn to meet the costs of its massive oil spill … http://bit.ly

FT: Deutsche Bank confident on continued recovery: The German bank reports net income of €1.2bn for the second quarter… http://bit.ly/d9l44f

CNN Money: BP ousts CEO Hayward and taps an American http://bit.ly/arpu8V

MarketWatch: BP shares fall after it confirms CEO replacement; earnings propel banking-sector gains http://on.mktw.net/ac2jkx

DailyFinance: Oracle’s Larry Ellison Is Highest-Paid CEO of Decade http://bit.ly/biljcG

DailyFinance: DuPont Earnings Beat Estimates, Raises Guidance http://bit.ly/duqCy1

Yahoo! Finance: BP second quarter loss -> $16.97B; oil spill amounts to $32.2B http://yhoo.it/9oLdUM $$ $BP #earnings

Douglas A. McIntyre

Apple Inc. (NASDAQ: AAPL) is not just one to watch with earnings due on Tuesday after the closing bell.  The Steve Jobs iPhone4 press conference felt a lot like the LeBron James conference, and the “success” of that conference is still up for debate.  The notion that Apple was down only 0.6% on a Friday when the NASDAQ closed down 70 points and the DJIA closed down 261 points may lean toward more of a win than a loss.  We are rethinking our earnings strategy for the Apple release, and we have some options data as well.

BP plc (NYSE: BP) is of course one to watch.  So far, the cap on the well is holding.  There are also still reports that the company is approaching investors over a possible break-up.  We’d  note that the company just did a biofuels purchase this last week and so far no huge investment has been made into it and calls for anything more ominous have gone unanswered.  We put Tony Hayward as one of our CEOs to go this year.  Shares rose more than $10.00 per ADR off of the lows in just 10 or 11 trading sessions and now the ADRs are at $37.10.

CROCS Inc. (NASDAQ: CROX) is a standout stock, but not for events.  The stock closed up 2.4% at $10.50 on an awful market day with a 52-week range of $2.91 to $12.28.  A stealth analyst call for raised estimates for 2010 and 2011 from Piper Jaffray may have it back on the map with a move away from wholesale dependence and a move away from just the original products.  The fad-clothing and  shoe-maker has actually beaten earnings estimates in the last three quarters and the stock is up 80% so far this year; But… This did not really participate so much in the latest rally and the stock was just above $12.00 as recently as June 21.  CROCS is not on our consumer shopping list, but the stock is on the radar now.

General Electric Co. (NYSE: GE) is back to a push-and-pull level after earnings.  Had the market been up on Friday, the vote would have been that earnings were pretty good rather than a 4.6% drop to $14.55.  The stock could retest $14.00 or a tad lower as it did in June and there is some overhang with the 50-day moving average at $15.81 and the 200-day moving average at $16.22.  What GE has going for it is a new higher earnings base, a more stable financial unit,  a dividend that is going to be raised soon, and an implied $20.00 price target for 2011 based on 15X earnings.  That alone won’t make a huge rally, but this should act to buffer against endless downside from what we have already seen.  At $14.55, the 52-week range is $11.25 to $19.70.

Google Inc. (NASDAQ: GOOG) fell after earnings and with the market on Friday.  Much of the bias has gone negative now (even from Jim Cramer) as Google has adopted so many wars on so many fronts.  Monday may be a change for it though.  Guess who snagged the cover-story for Barron’s this weekend?  Google… Barron’s noted, “Many investors think Google’s amazing run is over. It’s not. The stock is undervalued by 35% or more.”  We’d note that the article is not signaling much different from what the average analyst price targets are, but this is still a win for Google holders.

Orexigen Therapeutics, Inc. (NASDAQ: OREX) now has a different FDA bias after the VIVUS implosion Friday.  This will put Orexigen in a negative light.  Shares closed down 9.4% at $4.53, and the 52-week trading range is $3.81 to $10.83.  This stock almost hit $6.00 ahead of the VIVUS FDA debacle, so it lost almost 30% and is still going to be on many trader watch lists for both buys and sells ahead of its own FDA event scheduled late this year.

Safeway Inc. (NYSE: SWY) may finally be worth a look according to a Barron’s feature.  The article noted that California is improving and the company is well-positioned for a recovery.  This may be good for a 1% or 2% pop in a static market Monday.

SandRidge Energy, Inc. (NYSE: SD) has finally closed its merger with Arena Resources.  That deal was incredibly dilutive in share count as the float seems to have effectively more than doubled and its market cap will have doubled as well when it is all said and done.  The beauty of this deal was that SandRidge is now more of an oil company than a nat-gas company and management is viewed as strong here; and the new profit estimates for the combined company should start coming out favorably from analysts this coming week.  Shares closed up 1.7% at $6.58, which looks to be partly from a Jim Cramer endorsement this week, but the 52-week range is $5.20 to $15.00.  Despite the new-normal and the bias against energy companies, holders of the combined NewCo no longer have to worry about the endless shorting and pre-closing trades any longer.

VIVUS, Inc. (NASDAQ: VVUS) was given yet another huge blow after the FDA panel said that the risks in Qnexa for weight loss should keep the drug off the market.  As a reminder, FDA “approvals or rejections” do not always follow the advice of their panels. The verdict is that VIVUS won’t have a blockbuster with Qnexa now.  Shares were down 55% at $5.41 on Friday.

VocalTec Communications Ltd. (NASDAQ: VOCL) got on the map Friday.  It merged in almost what felt like a SPAC merger.  VocalTec and YMAX Corp., the creator of MagicJack, have successfully merged and will be traded on the NASDAQ under the symbol “CALL” on Monday, July 16, 2010.  MagicJack is that $21 or $22 a year telephone service you see advertised on TV all the time.  More details are here for the company’s outlook, new share price for a reverse split and more. The stock closed up 150% at $3.30 as the news is that well received.

Vonage Holdings Corporation (NYSE: VG) was down on Friday, but mostly because of the market.  The VocalTec-YMAX-MagicJack situation is going to bring Vonage more in the light and more as a target of price competition.  While MagicJack is different, it seems to be the hands down winner on price.  Closing on the lows of the day Friday at $2.28, the 52-week range is $0.33 to $2.79.

EARNINGS PREVIEWS:

• 11 DJIA Components report this week; full previews and color added on each.
• Almost all major airline companies report earnings this week.
• Rethinking Apple earnings and options.

JON C. OGG

Jon C. Ogg
June 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.