Vonage Starts Trading, Down

Update: Vonage Holdings has sold 31,250,000 shares of common stock at a price of $17.00 per share and has started trading on the New York Stock Exchange under the symbol “VG.”

vonage stockThat works out to about $531 million in funding raised from the markets. Citigroup, Deutsche Bank Securities, and UBS were the joint book-runners. The stock that started trading this morning, jumped out of the gate to $17.25, it has started to skid – down about 10%. Below $14

Looks like Russell Shaw’s comparison of Vonage IPO with a cult movie is coming true. “Then it started to occur to me how much this opening burst of enthusiasm resembles an opening night of a movie with a loyal, but narrow audience,” he says. Well put, Mr. Shaw!

Andy Kessler adds: “Citigroup raised the number of shares in the deal, but not the price. Bad move – it signaled some weakness. Worse was pricing it at $17, the mid point of the $16-18 filing range. It broke price in the first few minutes and then broke the bottom of the range in the first hour. Citigroup got paid their 7% fee, Vonage got their money to live another year or so, but now its a broken deal.”