Everyone hates Vonage, even the people who sold you the stock. Feel suckered? Too bad. Thems the rules. As Henry Blodget explains:
A month after the deal was shoved into the hands of customers and others at $17, it is trading at $8.25. And now, in an action that demonstrates the drawbacks of the "new era" of Wall Street research, in which analysts have no role in the IPO process, two of the underwriter analysts have dissed the stock. One is troubled by the company's execution. The other is worried about competition, heavy spending, and IPO lawsuits.
Now, let's look at this from the perspective of an IPO buyer. Your trusted Citigroup or UBS financial advisor calls up and says, "We've got this great new IPO you should buy--a cool Internet phone company that's growing like mad."
You: "Sounds great. What do your experts think of it?"
Advisor: "Well, our analysts aren't allowed to tell us what they think anymore, because that would be a conflict of interest, but our bankers are experts, too, and they LOVE it!"
You: "Awesome, sign me up!"
[Editor's Note: Since it's been awhile, maybe we should explain our Vonage graphic. It represents "Is Vonage Screwed On Crack/Toast/While It's Stock Price Dives?"]
Vonage Underwriter-Analysts Pee on Stock, Further Insulting IPO Buyers