Updated from 8:31 a.m. EST
climbed 9 5/16, or 25%, to 46 13/16 in Thursday morning trading on news that
paid $20 million for a 4.7% stake in the email provider. (Commtouch closed up 11 5/8, or 31%, to 49 1/8.)
Redmond, Wash.-based Microsoft exercised a warrant to buy 707,964 Commtouch ordinary shares at 28 1/4, a roughly 25% discount to Commtouch's Wednesday closing price of 37 1/2. Commtouch, which is trading near its 52-week high of 39 5/8, had a market cap of $477 million at Wednesday's close. (Microsoft settled down 3/8, or .32%, to 117 5/8.)
"This investment strongly reinforces Microsoft's recognition of Commtouch as both a key technical partner and a leading provider of integrated email outsourcing services," Gideon Mantel, Commtouch's CEO, said in a statement.
In October, Microsoft agreed to use Santa Clara, Calif.-based Commtouch Software to handle some of its
online services, including its Web-based email and instant messaging. That deal provided for the warrant agreement.
The companies said that over the last several years, Commtouch has built a scalable infrastructure based on a variety of Microsoft platforms and technologies. The relationship with Microsoft underscores the commitment by Commtouch to Microsoft's leading-edge messaging technologies and Commtouch's continued leadership in the email outsourcing market.