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Vonage Stock Trips in First Day of Trading
By Larry Hendrick | May 29, 2006
I am fascinated by this IPO by Vonage. They are the most prominent and probably the VoIP service with the most customers, but they are generating a huge black smoking hole with the money they are burning through. It seems to me I remember reading their burn rate was something like $100,000 per month. Not only is there no profit, they don’t even have a business model that will produce a profit in the foreseeable future.
Skype owner, eBay, has announced free VoIP service until the end of the year to grow their subscriber base, making it hard for Vonage and other competitors to charge $25+ each month plus the cost of broadband.
This is one I will definitely be watching for a while.
Technology News: Wall Street : Vonage Stock Trips in First Day of Trading
Score one for the skeptics.Vonage (NYSE: VG) made its Initial Public Offering (IPO) on Wednesday in the face of analyst concerns about an ultra-competitive landscape and an unprofitable business plan for the firm. The Internet phone pioneer wound up selling stock below its issue price. Shares were initially priced at US$17 and quickly dropped. Vonage closed its first day of trading down $2.23 to $14.77.