Vonage IPO

I know Vonage was looking for buyers for some time and since they could not find anyone willing to pay their price they went with plan B, going public. This month they did their IPO and shares started selling at $17 and then fell drastically within hours.

It looks like their share prices were overvalued at opening and as a result fell to levels investors felt were more adequate for the company. The real issue is are these stocks really worth over $10 a share... Better yet are they worth over $5? Vonage is known to be a very non-profitable entity spending millions and millions of dollars to acquire customers. AOL used to do this way back when and on average it took AOL 2 years on each customer before they started making a profit on that individual and now Vonage has been trying the same thing. They were never worried about profitability and a good ROI, all they wanted was a huge customer base so they could sell their business to investors based on that alone.

Problem is anyone who was to buy them or invest in them realized that besides a huge customer base they would be left with a business that just sucks up cash and brings very little back to the table.

To read up further on this visit: http://www.internetnews.com/bus-news/article.php/3611221