In tandem with releasing its Q3 results, magicJack (CALL) has announced it's buying back $13M worth of shares from founder Daniel Borislow, and that it has reached a deal under which Borislow "will not have any ongoing involvement in the business or operations of the Company or any of its subsidiaries."
The deal also features a standstill provision that requires Borislow to "refrain from taking certain actions as a shareholder of the Company," or to compete against magicJack, for two years. Borislow has also agreed to assign magicJack certain IP rights.
In return, magicJack will be giving Borislow 300K new shares, and outsourcing "certain live chat customer care activities" to a company affiliated with him.
Borislow has been a controversial figure for some time. Earlier this year, SA contributor Copperfield Research noted Borislow has been sued for securities fraud, and suggested he has engaged in unethical behavior at multiple companies/organizations.
magicJack is guiding for 2013 revenue of $140M-$142M; that's less than the $150.3M forecast by the one analyst covering the company. The company ended Q3 with 3.3M active magicJack subs, down from 3.36M at the end of Q2. On the other hand, magicJack's registered app users rose to 5.61M from 4.37M.
Shares +10.1% premarket. CC transcript.