Vonage IPO drawing investors in, analysts say

VoIP specialist Vonage is set to go public this week at a price that appears to be drawing in plenty of investors, but skeptical glances from some analysts, according to an Associated Press report.

The report said Vonage Holdings had set the pace in the market for VoIP, but its future was far from assured now that the giants of the telecom industry, in particular the cable companies, had started getting serious about the business.

The company was expected to sell 31.25 million shares in its IPO on the New York Stock Exchange under the symbol "VG," the report said. The company expected to get $16 to $18 per share, an estimate it reaffirmed in a regulatory filing.

Interest in the IPO appeared strong, according to analyst James DeStefano of Renaissance Capital, which tracked IPOs, the report said.

If the shares were priced at $17 each, the value of the entire company would be $2.6 billion, the report further said.

The report said the company had 1.6 million subscribers as of April 1, meaning the upper end of the IPO range valued the company at about $1,600 per subscriber.

Richard Greenfield, a cable industry analyst at Pali Capital, however, believed the IPO would be attractive only below $10, due to competition not only from the cable companies, but from computer-based calling services such as Skype, the report said.