Let me clear my throat:
Business Week, the journal that did more caning of the disastrous Vonage IPO than any other, is now suggesting the VoIP provider could be a "buy." One of the
worst initial public offerings in years (and one of the worst-timed), Vonage saw its stock driven down 30 percent to $12 per share since trading began May 23. To add insult to injury, the company got
in an ugly dispute with customers who didn't want to pay for shares reserved for them at $17 each (the initial offering price). Even so, the article says, "most every company is worth
something." Sure, but a one-trick pony VoIP company that offers an overpriced service? Surely cheaper competition from Skype and others will drive down this company's valuation even further!
Nevertheless, some analysts on the Street are saying Vonage has fallen enough. Albert Lin of American Technology Research does some highly speculative research that results in Vonage taking a
pre-overhead profit of $574 on every customer (assuming the average consumer stays with the company for four years). He says the company will be able to turn a profit with 8 to 10 million subscribers,
which could happen in four years. For me, that's assuming Vonage won't have to budge from its $26 per month subscription service (highly unlikely), and that everything else goes right.
Read the whole story at Business Week »
