So the Vonage IPO is tanking we are supposed to be surprised? Jumpin's. One look at their marketing spend / efficiency numbers (marketing as a percentage of gross profit) together with the increasing competitiveness in the consumer VOIP space and anyone with half a brain would have questioned the viability of the thing. What's worse, though, is that because they set aside up-to 15% of the IPO for their customers, it is many of Vonage's very expensively-acquired customers who are now left holding the bag. And - gasp! - some of them are ticked.

The New York Times is reporting that there is so much backlash from their customers that Vonage is offering to protect  the brokers who handled the sale in the event that their customers don't pay for the shares. They were issued at US$17 but have already fallen to US$12.50 as of yesterday. As Mark says, this is a nice goodwill gesture, but it says more about the validity of the IPO itself than anything else. Michael Urlocker has a good round-up of the history of this IPO itself. Henry Blodget does his normal yeoman's job here.

You know, this reminds me a lot of when Canada 3000 went public. At the time, there were heavy rumors that they had shopped the company around to all-and-sundry and couldn't get a taker. So, what to do? Is it possible that somebody thought "Hey, let's hoist it on the public, they'll buy anything"? You bet. And buy they did, no doubt many customers and employees among the purchasers.

They were gone in less than 2 years.

Vonage, and investors, take note. Oh, and yes, the ad below *is* ironic.

Tags: vonage, vonageipo, goatrodeo