May 23, 2006 4:21 PM PDT

Vonage hopes to raise $531 million in IPO

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Internet phone service provider Vonage Holdings on Tuesday priced its initial public offering at $17 per share, for a total value of about $531 million.

The company is offering 31.25 million IPO shares, which will start trading Wednesday on the New York Stock Exchange. In April the company set the range for its offering between $16 to $18 per share. The company also said it would use the proceeds of the IPO to expand its business and cover its operating losses, which have mounted as a result of an aggressive marketing campaign.

Earlier this month, the company set aside about 13.5 percent of the shares being offered to its customers. The company's shares will trade under the ticker symbol "VG".

Many on Wall Street are watching the Vonage IPO closely to see how investors receive it. Because the company is not yet profitable and has racked up a high level of debt, some analysts wonder if investors will bite.

Vonage sells an Internet telephony service that allows people to turn their broadband connections into telephone lines. The company, which has about 1.6 million subscribers, has marketed itself as an inexpensive replacement for traditional telephone service from companies such as Verizon Communications and AT&T. So far, it has built a strong following.

But Vonage now faces stiff competition from a slew of other telephony services, including cell phones, cable telephony from companies like Comcast and Time Warner, and free Internet calling services from companies such as Yahoo, AOL and eBay's Skype.

See more CNET content tagged:
IPO, Vonage Holdings Corp., New York Stock Exchange, telephony, Wall Street

2 comments

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Not hopes to
By now, it would appear that Vonage has already sold the shares to the underwriters, so they've already raised the money.

What the stock does on the market tomorrow has no impact on that, so you might want to adjust the title of the piece...
Posted by booboo1243 (328 comments )
Reply Link Flag
Not hopes to
By now, it would appear that Vonage has already sold the shares to the underwriters, so they've already raised the money.

What the stock does on the market tomorrow has no impact on that, so you might want to adjust the title of the piece...
Posted by booboo1243 (328 comments )
Reply Link Flag
 

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