Pioneer consumer VoIP company Vonage Holdings Corp. announced a price of $17 per share for its initial public offering (IPO) of 31,250,000 shares of common stock. At that price, Vonage will net approximately $531,250,000 from the offering.
Vonage will trade on the New York Stock Exchange under the symbol "VG."
The company has granted the underwriters in the offering the right to purchase up to an additional 4,687,500 shares at the initial public offering price to cover allotments, if any, which would net an additional $79,687,500.
The offering is led by Citigroup, Deutsche Bank Securities (a division of Deutsche Bank AG), and UBS Investment Bank, acting as joint book-running managers, and Bear, Stearns & Co. Inc., Piper Jaffray & Co., and Thomas Weisel Partners LLC, as co-managers.
The offering was greeted with some skepticism, according to press reports. Some financial analysts believe that Vonage is facing difficult competition in the crowded consumer VoIP arena.
There is increasing price pressure in consumer VoIP services, particuarly from free or very low-cost services based on softphones, such as Skype Technologies S.A., Yahoo! Inc. and Google Inc. More traditional fixed-VoIP providers, such as Vonage or Packet8 (a service of 8x8 Inc.) are countering with additional features, such as new messaging services or softphones of their own.
Also, VoIP is Vonage’s only service at this time, while for other providers, such as Google and AOL LLC, VoIP is just one of a range of online consumer and business services that they offer and which also generate revenue. Further, some of these services augment their revenue with advertising, such as AOL’s plan to include advertising in its very low-cost softphone service.
