In December 2004, Arbinet (NASDAQ:ARBX) went public at $17.50. But IPOs can be dicey for investors, and Arbinet has been no exception. The stock is now trading at $7.13. In fact, the 52-week high is $24.33.

Of course, the founder of the company, Alex Mashinsky, is not happy and is taking action: a proxy fight. A former executive of Arbinet, Robert Marmon, is joining the fight, and the two are seeking to provide board of director nominees -- in response, ostensibly, to the company's declining stock price.

Founded in 1996, Arbinet is an electronic marketplace for the communications industry. For example, members use a Web-based interface to buy and sell Internet capacity and voice calls, effectively brokering capacity. For every transaction, Arbinet handles the complex process of routing calls; nearly 400 carriers are currently on the system.

While VoIP traffic has been strong, Arbinet is suffering from a slowdown in overall volume. In the fourth quarter, fee revenues declined 4% to $12 million. During this time, the total minutes bought fell from 3 billion to 2.92 billion.

Net income for the fourth quarter was $4.7 million, or $0.18 per diluted share, which was down from $6 million, or $0.27 per diluted share, in the same period a year ago. Still, the company has a healthy $63.6 million in the bank.

Management has indicated that it may use its cash to expand into new markets. After all, Arbinet has a powerful platform technology. But just as it took several years to build a dominant position in the telecom industry, it is likely to be the same for other verticals.

As for Mashinsky and Marmon, they own only 3% of the company and can nominate three directors, which is not enough to take control. However, the proxy fight could be a spur for management to make significant changes in its business. Given the company's investment in networks and its platform, I can't help thinking this is something the company could (and should) have done several years ago.

Fool contributor Tom Taulli does not own shares mentioned in this article.