Vonage is one of the VOIP providers, who unlike the traditional telcos who are rolling out VOIP services, was conceived solely to offer consumers Internet Telephony.
Yesterday it had its IPO, and in the worst of its kind this year, the stock tanked 10-15%.
Not good for investors who bought in yesterday, or for that matter, the VCs who have poured so much money into the business.
What’s noteworthy here, once again, is that despite all of the hoopla over VOIP, the companies who stand to gain most are not the companies like Vonage who offer the phone packages, but rather, the companies that sell the “shovels and helmets” for deployment of phone services over the Internet, companies like Nortel, JDSU, etc. Note that I own shares in a cornucopia of these networking companies who have seen their shares fall off 90-95% since their pre-dot com bust bubble levels.
Nonetheless, in 1-2 years, when the VOIP promise goes from concept to reality, companies like Vonage will be reducing prices and cutting their margins in the fickle consumer and business segments while the networking companies will be offering more and more nuts and bolts to these.
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