Enck's guide to personal wealth creation 1.0: Short your own VoIPO
Oh dear, what an inauspicious start for Vonage, not that I had expected anything different. My screen shows the maiden stock closing down 12.7% on the day, on volume of 26.1m shares (that's four times the volume in Verizon), with some major order imbalances late in the session (on the short side).
I have very mixed emotions about this company: I first started talking to them in late 2002, and they were incredibly gracious and open - I should acknowledge the fact that Vonage was a key stepping stone to my creating the blog you are reading now. In point of fact, if it hadn't been for my fortuitous early contacts with Vonage, Jeff Pulver (the original Vonage co-founder) and Skype, you and I wouldn't be having this monologue right now.
Then again, I can't help but think of a mega-uber value reader and friend's assessment that "it's easy to spot the pioneer, he's the one with all the arrows in his back." The innovation cycle has truncated (all the man-years Vonage invested in its offering now come in a box with a four-week market launch timetable), everyone and his uncle has a VoIP business plan, consumer and market expectations about the nature and role of voice have changed, and sadly I think Vonage has ended up way out of step with the times.
As I stated in my earlier post, I think the company waited at least a year too late to do this deal - now the momentum in the US is with cable, and globally, with new models for voice. I was also perplexed to hear from a friend on the buyside that the European roadshow team consisted of six (6) members of management, including Jeff Citron (engaging though he is, why he was even there I am not sure), who apparently literally did all the talking.
Nevertheless, we shouldn't ignore, nor disrespect, the powerful galvanizing force that this
company has been for VoIP awareness generally. It would be easy to stand here with the benefit of hindsight and poo-pooh Vonage's efforts. A little Googling will uncover some much more bullish assessments in the blogosphere from not so long ago.