Remember Vonage (VG)? Investors and O.J. are trying not to

When Vonage Holdings Corp. (NYSE:VG) IPO'd it appeared to be the next biggest thing since Google. Everyone was all fired up and VoIP was going to take America by storm, there was billions to be made, and you better switch fast because landlines and dail-up were a thing of the past. VoIP is now, Vonage is the next big thing, buy the stock now, Vonage, Vonage, Vonage!!!

Just over a year later - hello $1.96 a share.

I'd be willing to bet the traders on Wall Street would rather buy a hot dog on 57th then pony up close to $2 for one share of Vonage. It's been painful to watch the worst IPO of the year fall to new lows: Patent Issues, Verizon (VZ) and Sprint (S) giving them the Hiesman, SunRocket suing them, and worst of all - the lack of profits. Investors have lost so much money, they just stopped counting, and despite all their 'new and improved' pricing plans to land more subscribers, just about nobody cares. It appears hopeless. No my friends, it is hopeless -- Vonage is dead.

I can't count the downgrades that have occurred on VG and all the issues on the stock, it's just bad, really bad. The latest is the liquidity concerns and just about everyone wants money from them including their own un-happy subscribers. How in the heck did these guys ever IPO?

The only thing that could save this dying company, would be a buyout. The End. But who would want to buy them? Icahn? Sprint Nextel? Comcast? Google? How about no one. I don't see what you could get for your money if you bought Vonage besides the 2.4 million subscribers they have, but is it worth it? There's so much going against Vonage right now that I think O.J. Simpson could make a better case of getting out of his current dilemma. In a way, they are really similar:

Both O.J. and Vonage 'stole' their own bread and butter, one is sports memorabilia the other is technology patents. They both have about a million people suing them and if they do manage to make any money, everyone wants a piece or is going to get a piece of their income. Maybe O.J. could become the new spokesperson for Vonage, just like he did back in the day with Hertz. Running through an airport, looking good, then he stops to make a call using his special Vonage VoIP phone. Investing in O.J. is almost as good as investing in Vonage right now. You think you want to make money from VG? Just think of the original investors. Can't remember the list? Just visit an article we did a few months ago titled: Vonage Holding Corporation: The Conspiracy Theory - you can bet those dudes are pissed.

Believe me Masters, I'm trying to find something positive about Vonage (and O.J.) but I can't. Maybe shares will bounce, it's possible, the stock is way low. Then again, maybe O.J.'s not guilty?

Article written by: Frank Lara Jr.
Article posted on: September 19th, 2007

Disclaimer: The Author does not have any positions in any of the securities mentioned in this publication.

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