Vonage, the VOIP company which had its stock debut on the open market only yesterday, has seen a 14 percent drop in share price by midday Wednesday.
Vonage has acknowledged it may never be profitable and is viewed with skepticism by many analysts, who cite the growing competition it faces in providing voice-over-Internet protocol (VoIP) services.
“It’s very hard to see what their competitive advantage is,” said Richard Greenfield, an analyst at Pali Research. “We basically believed, pre-IPO, that the price should be $10 or less.”
The IPO, which priced Tuesday at $17 a share, the midpoint of a previously established range, raised $531 million. The Holmdel, New Jersey-based company said it plans to use the proceeds to fund expansion and marketing and repay debt.
Source: Reuters
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