How will Wall Street react to Vonage? The VoIP provider priced 31.25 million common shares in the mid-range at $17 per share, for an IPO take of about $531.25 million. The company will trade on the Nasdaq under ticker symbol VG. The price implies a value of about $2.65 billion for a company that is far from profitable. Vonage has already raised around $396 million in total VC funding, including a $200 million Series E deal in 2005 at a post-money valuation of $915 million. Vonage will use the proceeds primarily for marketing costs and customer acquisition as it is spending a bundle to capture customers amid the competition. With analysts saying the company might never reach profitability because of strong competitive VoIP offerings, and the company's unsuccessful attempts in the past to sell the business, you have to wonder if this is the exit strategy.
To read more about Vonage's IPO:
- check out this article from The Wall Street Journal (sub. req.)