One day, you are a “struggling” ISP, with your stock languishing in the $15 to $30 range. The next day, you announce that you are offering free Internet access service, and your stock takes off. That’s what happened to Juno Online Services (NASDAQ:JWEB), which saw its stock explode from Friday’s closing price of $16.38 to $66.75 at the end of Tuesday’s trading. Generally, Juno’s stock volume has been in the 10,000 to 20,000 range per day.
Is this a show of “Net logic,” with stock prices zooming when companies announce that they are giving service away for free, or is this a recognition that providing free Net access is viewed as a first step in gaining customers on which one can generate a healthy profit through other means?
NetZero (NASDAQ:NZRO) has generated two million customers who get free Internet access in return for agreeing to put up a mini-browser that displays special ads. NetZero’s stock, however, has floated in the $30 range since it went public in October. So, go figure.