At WorldGate, Mister Ojo's Rising

Shares in video-telephone wannabe WorldGate Communications (WGAT Quote) jumped as high as 34% Tuesday, for no apparent reason.

The stock's rise reflects remarkable confidence in a company that doesn't expect its signature product to hit the market until the third quarter -- a company that sold its former core business at fire-sale prices last year.

Or perhaps it reflects little more than a cynical momentum play by investors whose lesson from the dot-com bubble wasn't to avoid throwing money at untested bit players with inexplicably high valuations, but to invest in them all over again -- only this time planning to get out before everyone else.

Thus, as the prices of eBay (EBAY Quote), Amazon.com (AMZN Quote) and Yahoo! (YHOO Quote) soar to postbubble heights, market-watchers are treated to sharp movements in stocks such as unplugged incubator CMGI (CMGI Quote), newly IPO'd Chinese travel agent Ctrip.com (CTRP Quote) (which, despite the dot-com pedigree, does most of its sales via telephone) and now WorldGate.

A few hours after the morning surge, WorldGate's shares were trading at $2.10, up 42 cents, or 25%. The shares have doubled since late November, thanks in part to announcements that the company -- which last year indicated it could fund operations only through the first quarter of 2004 -- has raised $1.6 million in a private stock placement and traded stock for an additional $500,000 in vendor credits.

Video Stars

WorldGate Chief Financial Officer Joel Boyarski told TheStreet.com Tuesday he wasn't sure why the company's stock rose Tuesday. "There's nothing that's been announced per se," he says, though he suggested the movement might be a carryover from a press release issued last week indicating the viability of the company's forthcoming product.

For investors who are interested in WorldGate's actual operations, that product is the Ojo video phone, which the company promises will provide high-quality, full-motion, audio-synchronized video telephony over the Internet, provided each user has a cable modem or DSL connection to the Internet.