Monday is the last day to exit before earnings release

Posts: 111 · Vonage Forum Senior Joined: Jun 15, 2006 Posts: 111

My predictions:

Churn rate rises from 2.11% to 2.35%

$115 million in cash burned to a crisp

The IPO only raises $475 million, not the $491 that Vonage was expecting.

Customer aquisition costs continue to rise

Legal costs continue to rise

I'm not sure if this bad news will do anything to the stock price since bad news is pretty well expected. My best guess is that Vonage will hold up fairly well until we get into late fall. In November of this year suddenly all of the insiders will be allowed to sell the shares they aquired for in many cases less than $1 a share, and on average around $3 a share. At that point shares will tank.

Actually, I am long Aug $10 calls and short Oct 7.5 puts. Overall I am still short, but in the short term I am only slightly short. My short positions are for Jan 07, by which time I expect the stock to be almost worthless.

Posts: 243 · Vonage Forum Master Joined: Jan 18, 2004 Posts: 243

(74.1 million) versus (63.6 million) same qtr prior year.

But if you take out the $18 million charge needed to pay for shares not paid for by DSP members and the loss comes to (56 million). The forecast for profit was moved up to Q1 2008.

Posts: 111 · Vonage Forum Senior Joined: Jun 15, 2006 Posts: 111

gfoulks wrote:

(74.1 million) versus (63.6 million) same qtr prior year.

But if you take out the $18 million charge needed to pay for shares not paid for by DSP members and the loss comes to (56 million). The forecast for profit was moved up to Q1 2008.

Wrong! They accounted for the transaction as a purchase of treasury stock. If they booked it at $17 then it had no impact on earnings whatsoever. If they booked it its recent share price, the impact was still only about $4.5 million (7/17 x 11mil).

I applaud your attempt though, I think this is the first post by a VG bull that makes any calculation based on its financials I've seen here. It's a start!