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Citigroup is Vonage's underwriter

It appears as though Vonage is in a more problematic situation than earlier reported. It now appears as though Citigroup, the company that managed Vonage's IPO, has declared a state of "hold" on trading Vonage's shares. The problem with being given a "hold" rating however, is it's usually reserved for a company that's in a questionable state of  financial direction with the market. According to the report, Citigroup is telling the market that it's just not worth it to buy more Vonage shares at this time.

Since its IPO, Vonage's stock has taken a major stumble, dropping from a price of $17 to a dismal $8.60. Many investors who purchased Vonage's shares ended up filing lawsuits against the company for not properly disclosing certain risks and certain details about its services and direction. Some have even threatened Vonage not to pay for the purchase of its shares.

Analysts are concerned over the competition that surrounds Vonage, citing that companies like AT&T and Comcast are coming out with more attractive VoIP and data packages. After its IPO, many investors began worrying about Vonage's services and offerings, saying that the company didn't really bring anything special to the table. Vonage has continued to take a beating in the market ever since. Vonage has also loss a considerable amount of money in profits, which quadrupled in 2005 from 2004 to $261 million. Vonage's net profit margin currently stands at -82.47%.

Vonage is currently being served several suits from Verizon over patent infringement.




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