The Vonage (VG) earnings are out. Losses have increased by 17%, churn is up 9.5%, marketing expense is up 50%, and revenue fell below Wall Street’s consensus. The stock price, however, is off just 30 cents, or about 4%. Among this past quarter’s expenses: $18 million to indemnify their underwriters for IPO stock orders that were cancelled. Clearly the market has already contemplated the possibility of bad news. As Rich Tehrani observed:
For Vonage critics this is the exact news they wanted to hear and for Vonage advocates I feel this is also the news they wanted to hear. I think the bears probably won out though. We will see how this plays out next quarter.
Jon C. Ogg, on the 24/7 Wall Street Blog wrote an extensive piece concluding with:
…Â if you are evaluating the actual feasibility of the company as a going concern or as a surviving entity, you have your answer as to why the shares aren’t trading much worse. The verdict on their financial survival is not yet out, but the notion that you can actually start to make calculations and can start to at least try to quantify the odds of their survival is keeping the stock from falling off a cliff.
Very true. There is no need to speculate anymore. The durability of their business model is on display for all.Â
Alec Saunders is the Vice President of Developer Relations for BlackBerry make Research in Motion. This is his personal blog, with his personal viewpoints. Prior to this Alec was the CEO and co-founder of Calliflower — the easiest way to hold a meeting, online, on a conference call, or on the go. A double-decade veteran of product management and marketing, he spent nine years at Microsoft where he helped launch Windows 95, the first two versions of Internet Explorer, the Universal Plug and Play initiative, the push into home markets, opt-in email marketing and what might well go down in history as the very first direct email list ever.
