As a trade,I tend to believe there should be at least 5-15% to be made by buying in early and selling later in the day.Getting in and out of this stock for awhile might be the best plan of action until you see what's happening. Once the dust settles this might very well be a nice investment....But,be careful.
...along with careful,I would say being patient should be at the top of the list before putting your money in longterm.IPO's are a tricky deal.
As a Vonage user, I've been bombarded with IPO offers the past few days. The question is, "Should I invest?" I would only buy stock for short-term gain. For the record, I would never invest in Vonage long-term. Once cable and phone companies lower their VOIP rates (I mean, c'mon, Time Warner, $40?), it's all over for Vonage. (And don't forget free Skype, as DaDa pointed out.) Plus, the strategy of "bundling" services will make it tough for Vonage to compete in the future. I see them getting squeezed out in the near future.
Did you just write my paper on Vonage this week in business school? VesceySux is exactly right. I just wrote a huge paper on Vonage for a class in business school, and the writing is on the wall for them big time. In my paper, I recommended that they sell to a phone or cable company while keeping their brand. SO it would be something like "Vonage, a service of Time Warner." The reason for that is that they have done a good job of building their brand, but they'll get blown out when the legacy companies take VoIP seriously. Also, their expenditures are increasing exponentially every year -- primarily due to marketing costs. Their first 1.6 million subscribers were mostly tech-savvy early adopters who they could reach cheaply. When they go after mainstream users, it will be even more expensive to reach them. Put it this way, I wouldn't invest in a company whose annual report openly admits that they don't care about making a profit, but are solely focused on gaining subscribers.
No, but I DID stay at a Holiday Inn Express last night. 1) This conclusion is pretty much common sense if you understand the technology. 2) We touched upon the interplay between VOIP, telecom, and cable in IT class (also in b-school). Bundling is key.
Naz most probably. The thing with this IPO, as with the other "consumer friendly" IPO's this year is that many of these retail IPO's have done quite well. Chipotle and Tim Horton's comes to mind as some of these.
My buddy who runs a 500M fund for Merrill told me that Vonage IPO doesnt look to good on paper. Case in point for the first quarter, its loss increased to $73 million from $60 million although revenues more than doubled. In my opinion I think Vonage will cease to exist as its own company in a few years. You are better off having shares in Ebay owned Skype if you want to play this technology. My firm- we don't invest in IPO's but I do follow the general trends in the IPO market though.
I always thought skype was only free for computer to computer calling, while skyping out costs money.
