Vonage Tanks In Market Debut - InformationWeek
IoT
IoT
News
News
5/24/2006
06:17 PM
50%
50%
RELATED EVENTS
Faster, More Effective Response With Threat Intelligence & Orchestration Playboo
Aug 31, 2017
Finding ways to increase speed, accuracy, and efficiency when responding to threats should be the ...Read More>>

Vonage Tanks In Market Debut

Vonage's debut was the worst since nanotechnology company Lumera, which lost 13.5% during its first day of trading in July 2004.

Vonage Holdings Corp.'s market debut on Wednesday got a cold shoulder from Wall Street, as the Internet telephony company posted the worst first-day performance in two years.

The Holmdel, N.J., company launched on Tuesday its initial public offering, which set the share price at $17 at the market opening. Despite inching up 25 cents for a time, Vonage stock finished the day at $14.85, a 12.6 percent drop from the IPO price.

Vonage's debut was the worst since nanotechnology company Lumera Corp., which lost 13.5 percent during its first day of trading in July 2004, The Wall Street Journal reported.

Vonage raised $531 million in its IPO, which it filed with the Securities and Exchange Commission in February. The company at the time said it needed the money for expanding its business and to fund marketing and operating losses.

Vonage's strategy has been to trade profits for heavy spending on marketing to increase its customer base, which has reached 1.4 million subscriber lines. In the first three quarters of 2005, the company lost $189.6 million, while spending $176.3 million on marketing, according to SEC filings. The company remains unprofitable today.

Vonage's historic losses and the tough competition it faces in the market apparently left many investors on the sidelines. Besides having to eventually turnaround its finances, Vonage faces competition from companies with greater financial resources. EBay Inc., for example, acquired Internet telephony vendor Skype, last year. In addition, major telephone companies, such as AT&T, are moving into the market for voice over the Internet.

Comment  | 
Print  | 
More Insights
Comments
Oldest First  |  Newest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
IT Strategies to Conquer the Cloud
Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll