Some newsy tidbits beg for a little more color to make them tantalizing. For instance, take Citigroup's
There are two points in fleshing out this train wreck. The first is that Citigroup was one of the lead underwriters, handing over Vonage shares to new investors at $17 a pop just five weeks ago. The second point is that with the stock down to half its IPO price at the moment, the company's quiet period ended over the weekend and some battered investors were expecting good news from a chattier company.
Did I hold myself to just two points? Can I have another? Thanks. Point three, class action lawsuits are popping out like guppies, with some alluding to Vonage customers that were offered shares at the IPO but are refusing to pay for their purchases now that the stock has tanked and the company's viability is being questioned. A week after the IPO, Vonage issued a terse statement spelling out that buyers are obligated to pay for the stock they bought as part of the customer directed share program. Let's hope that its billing department never has to suffer that kind of problem.
I love it when companies offer their patrons a shot at a ground-floor opportunity. It empowers the individual investor. You have seen companies like Google
Vonage can't seem to catch a break these days. It's trying, though. As soon as eBay's
When will the bleeding stop? It's hard to say. Every indication is that pricing will only get lower for VoIP, and that's a problem because Vonage isn't turning a profit at current prices.
Telco giant offerings like AT&T's
So, sure, it stings that even one of its underwriters feels that the IPO price that the market was willing pay in late May is out of whack with reality. Move on. Until Vonage officially cuts its price to $19.99 and presents a clear path to profitability at a lower price point, there may be some more unwelcome static in this connection.
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Longtime Fool contributor Rick Munarriz admits to being impressed with Skype's free service. It saved him a bundle during his family vacation last month. He does not own shares in any of the companies mentioned in this article. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.