Trading Strategies

Posts: 6 · New Forum Member Joined: May 23, 2006 Posts: 6

more likely than not, you are right. But I am still going to have a lowball limit order open through my independent online trading account just in case...

Posts: 13 · Vonage Forum Associate Joined: Oct 18, 2005 Posts: 13

there will probably be a big push from the retail (individual) investor in vonage (VG) stock, but you have to ask yourself why it priced at the middle of the range. institutional investors were buying 86.5% of the IPO stock. if the stock does open above $20 (as about half the people in the straw poll predicted) -- the brokerages weren't doing vonage any favors by not pricing this at the top of the expected range. $1 may not sound like a lot, but it translated into $31.5 million. and vonage is paying these firms millions of dollars to take them public.

i'll repeat what i said on the now gone IPO thread. Amazon (NASDAQ ticker AMZN) has a market cap of $14Billion on $9Billion revenue and $330 million net income. i wouldn't value VG at 1/4 of AMZN's market capitalization. growing your revenue 200% in a year is great, but spending $3 to generate $2 in revenue isn't a business model that will last. if you look at skype's #'s in EBAY's latest 10K and 10Q, you see their net loss that looks better than VG. if you don't know where to look for this information, go to yahoo finance.

vonage has served themselves well by getting the cash they needed to run their operations (after all that is why they were doing this IPO -- to raise capital). for that you can rest assured that Vonage will continue providing service for at least the next year.

Posts: 18 · Vonage Forum Associate Joined: May 22, 2006 Posts: 18

WillyD wrote:

there will probably be a big push from the retail (individual) investor in vonage (VG) stock, but you have to ask yourself why it priced at the middle of the range. institutional investors were buying 86.5% of the IPO stock. if the stock does open above $20 (as about half the people in the straw poll predicted) -- the brokerages weren't doing vonage any favors by not pricing this at the top of the expected range. $1 may not sound like a lot, but it translated into $31.5 million. and vonage is paying these firms millions of dollars to take them public.

i'll repeat what i said on the now gone IPO thread. Amazon (NASDAQ ticker AMZN) has a market cap of $14Billion on $9Billion revenue and $330 million net income. i wouldn't value VG at 1/4 of AMZN's market capitalization. growing your revenue 200% in a year is great, but spending $3 to generate $2 in revenue isn't a business model that will last. if you look at skype's #'s in EBAY's latest 10K and 10Q, you see their net loss that looks better than VG. if you don't know where to look for this information, go to yahoo finance.

vonage has served themselves well by getting the cash they needed to run their operations (after all that is why they were doing this IPO -- to raise capital). for that you can rest assured that Vonage will continue providing service for at least the next year.

Spending $3 to get $2 in revenue per year is not bad considering you can cut that $3 cost and relatively maintain the free cash flow through 4 years.