Ive been looking at this the last few days and I think now is an attractive entry point. Thats right, its time to long Vonage.
as they say in basic investing... an undervalued dog... is still a dog. a $2 ugly whore... is still ugly
maybe at 2 it is still ugly.1.75? 1.50... that is the greatness of the capitalist system. at the right price there is an exchange. if it has no value it disappears.
Someone is accumulating and throwing a floor under it. Vonage ended the day yesterday at the high while the entire market ended the day at the low. Volume has picked up the last few days as if something is going to happen fairly soon. Checked the 10-Q and found this statement: "We expect our cash on hand to fund our net losses and capital expenditures for at least the next twelve months. " So they have not gotten to the statement where they indicate they might not be a going concern in the next 12 months. The accountants have not pronounced a death sentence yet and wont do so until next year. It all depends on the court case with Verizon now and how they can work around the patents. In any event, an explosion will happen fairly soon with the stock price and seeing that there is a floor being created with price finishing to the upside on a big down market day I say it will be to the upside. The judge is not a hang-em one. He wants VZ to work with them.
Up 5% today. I got in under 3 some days ago which seemed to be like a smart move considering the chart. Distressed stocks like Vonage can still be very profitable trades. I feel the potential is there for at least 3.5...
Good pure trade MS. But everyone here knows Vonage is a complete POS company with severe service problems in a custmer service industry ... and it doesn't help that they're outsourcing all of their customer service, I swear, if I hear one more "John Smith" talk to me over the fone with an india accent I'm gonna throttle that sucker! I hope you took it as a scalp. JJ
My opinion is that Vonage is a safe investment at this point in time. The 10-Q will let you know when its time to raise the flag. It goes in stages under the critical accounting section. The accountants will tell you when they believe the company will go bankrupt. So far we are at the "12 month of reserves left to fund the company" stage. The next stage will be the liquidity warning in which the stock will then hit the 1s-2s. It was trading at 6 and change last year until the lawsuit. During the worst part of the lawsuit, the company hit a floor of 2.83. In civil trials, you have all sorts of judges. This one seems to be a negotiator. I say if they negotiate a deal then VG will go to the 4-5 area. The art of distressed trading is knowing when it cant get any worse. At 2.83, the floor was set. It shouldnt get any worse until the accountants add the liquidity warning statements to the 10-Q which probably wont happen until 2008-2009. The accountants are generally honest about these things, but no one ever reads the 10-Q.