A View on View :: Vonage's Churn Concerns

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Vonage's Churn Concerns

by Mark Evans on Fri 10 Feb 2006 12:55 PM EST | Permanent Link

For anyone questioning about Vonage's IPO prospects, Om Malik has poured through the S-1. It reveals, he said, "more red-flags that the great Boston dig". In particular, Om focuses on Vonage's churn - the number of customers who leave each month - and the cost to replace them. The more I read about the Vonage IPO, the more I wonder how they can convince anyone to climb onboard. If you're an institutional investor, do you invest in a money-losing company in an ultra-competitive market at a time when some economists are saying the bullish market is over and a recession may be required to bring the U.S. economy back into equilibrium? That said, anything can be sold at the right price so it will be fascinating to see Vonage founder Jeff Citron in action during the road show. I'm no analyst but if there was skepticism about the Google IPO (and we should remember all those smart institutional investors who stayed on the sidelines), then the Vonage IPO is going to be an extremely tough sell.

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Re: Vonage's Churn Concerns

by Stuart MacDonald on Fri 10 Feb 2006 05:25 PM EST | Profile | Permanent Link

Man oh man. I have sooooo seen this movie. This is just like wireless in the US - *without* the few years of it being a good business when it first started.

Lovin' the Vonage ad in the "A" column btw. You go, kids!

-- Stuart

Re: Re: Vonage's Churn Concerns

by Mark Evans on Sun 12 Feb 2006 11:36 AM EST | Profile | Permanent Link

sign of the vonage times as the ad gets few click-throughs. not sure where vonage is getting its 1.2 million subs but don't think there are many in canada.

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