It was a tough first week of trading for Vonage; the voice over IP provider filed for an initial public offering at $17 per share but quickly saw its valuation slide 13 percent in its first two days
of trading. Vonage raised $531 million during its IPO; the market's response will tell you the price was set to high. In the build-up to the offering, many analysts were bearish about the stock's
potential, saying its bankers likely rushed the deal because waiting would adversely affect valuation. The company is bleeding money; in 2005 it lost $210 million, quadrupling losses from the previous
year and increasing its deficit to $467 million. Observers say its expensive marketing program is partly to blame. According to TNS Media Intelligence, an advertising research firm, Vonage was the top
online spender in 2005.Meanwhile the company said it plans to use the money raised during its IPO to continue funding its ubiquitous marketing campaign.
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