Smith Micro Software Inc.'s stock moved up 18% Wednesday after the Aliso Viejo company said it will form a new division to focus on its Internet software operations.
The company, which makes software that allows video and voice files to be attached to electronic mail, saw its shares rocket as much as 71% in heavy trading before settling back to close at $2.06, up 31 cents a share.
A total of 1.1 million shares changed hands, unusual for the closely held company, which normally sees volume of about 14,000 shares a day. Smith Micro's founding family continues to own about 69% of the company's outstanding stock. About 4 million shares are traded by the public.
Company spokesman Bruce Quigley attributed the stock's rise to the formation of the new unit and the company's acquisition Monday of Pacific Coast Software, a supplier of Internet commerce software.
"The two announcements solidify our goals and efforts in the minds of investors," he said.
Smith Micro made its first move into the Internet software market in the fourth quarter of 1998, but its core business remains its modem software, Quigley said.
He said Internet software revenue is growing each quarter, but he declined to break down the revenue further.