Vonage is set to go public today and the press couldn’t be more…doubtful? pessismistic? downright dismissive? This piece by the New York Times’ Ken Belson and Matt Richtel starts off with a story about a customer who chose Time Warner’s VoIP service over that offered by Vonage and then proceeds to cast doubt on the company’s prospects.
Om says that “seldom have more doubts been raised about any company going public.” Mark Evans has a good round-up of the naysayers here.
My favorite warning about the viability of Vonage’s IPO came yesterday from Pali Research’s Richard Greenfield whose report on the IPO was littered with dismal section headers such as “Why Would We Not Buy Vonage Shares Within The Current Range Of $16-$18” and “Loyalty Unlikely To Maintain ARPU – Vonage Subs Switched For Price Before.”
Bottom-line for Greenfield: Don’t pay more than $10/share for Vonage (even though the company is asking $16 to $18 per share).
We believe Vonage will have difficultly maintaining its current price point (as it needs to maintain a significant price advantage), with churn and SAC likely to move higher as cable operators prove to be more formidable competitors (as well as new software-based VoIP applications such as Skype).
Cynthia Brumfield at 8:48 AM|Comments(0)
Blogs We Read
