According to CBS Marketwatch (citing Flyonthewall.com, which gathers "information" from traders, brokers and institutional investors), the Vonage IPO is "multiple times" over-subscribed. The IPO will apparently be priced at $17 to $18 a share and raise about $531-million, which will mostly be spent on marketing campaign to attract and retain customers amid mounting competition. What I want to know is: who are these people who are so enthusiasic about Vonage? Then again, I'm curious about the millions of people who click on Google AdSense ads; who built the pyramids; and how they really get the caramel in the Caramilk bar. Maybe investors who have sifted through Vonage's S-1 must see something that makes them believe this company has bright prospects and/or acqusition potential. Or maybe there's just a lot of people who believe Vonage shares will pop when they start trading, and they want to make some easy money by getting into the IPO. (Update: The acquisition factor should not be discounted given an IPO could give potential suitors a better idea of Vonage's value.)
  For more, check out BusinessWeek's Peter Elstrom, who points out Vonage has yet to make money, and it's facing fierce competition from Skype, Verizon and other cablecos. Elstrom also quotes Renaissance Capital analyst James DeStefano, who believes Vonage should be compared with XM and Sirius, and valued on revenue per subscriber. The kink in this theory is Vonage's revenue could fall if competititon gets more intense. Om Malik also weighs in with some thoughts, and quotes analyst Jon Arnold, who told Reuters that "Right now, [Vonage] is a perennial money loser. And the growing competition also makes life harder for Vonage". The New York Times also has a story, while Preston Gralla has story with the colourful title "Vonage IPO: Only for Suckers?"