% | $
Quotes you view appear here for quick access.

Vonage Holdings Corporation Message Board

  • jasiop jasiop Feb 26, 2010 12:22 PM Flag

    To all small investors!

    If you bought VG for long hold do not worry about daily fluctuations.Daytraders have to make money too/ some of them/.If you check your stocks more often than three times per day you will become daytrader.The market will make you nervous, you will start experimenting with new strategies and lose everythig.It is a BAD ADDICTION, stronger than casino gambling.Trust me, I survived this stage in my life.
    All you need to know is that Market is going highier and so does VG.They have talented management,brand name,satisfied customer base
    and room to grow in hot sector.
    BUY ON DIPS is back in style.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Thank you for your is just common sense

    • The problem is that if they cut the marketing down, then it dramatically affects cash flow. The 2.5 million customers generate serious revenues at $30 each, but the cost of running the entire operation is too expensive. Not counting marketing, it costs them $27 to sustain each customer that brings in $30. If you spend 0 on marketing, then that $3 is profit. If this was their own money, that is how they would run it. Since it is the investors money, they can blow it all on marketing and keep riding the train until it fails. When they spend $25 million per month in marketing and only get a net income of $4 million, how do they pay off the debt? If they cut down the marketing and lose 100k subs per quarter instead of 10k, that net income of $4m will become a net loss of $10 million and so on. The debt can't be paid off. They have to blow all their money in marketing just to stay afloat. Once that stops, the ship is going to sink.

    • I have to disagree with you. VG does have a customer base of over 2M paying $30 a month for its service. This customer base is worth a lot of money.

      Let's say VG management decided to cut marketing down to just a few million a month (instead of $25M a month). They could do this by embracing internet advertising only (banner ads) and cut all else.

      Sure, the new subscribers would likely decline, but it would probably take 5 years to have the subscriber base decay to 1M.

      In the meantime, the cash generated would pay off the entire debt in a year. With reduced marketing, customer support could be cut dramatically since most of their support is probably dealing with short term customers. After that, they would generate around a $1 to $2 of cash each year. This has to be worth at least a five times multiple.

      So, this $2 stock should be worth at least $5 up to $10 just on the existing subscriber base.

      Not that they will do this. It took ELNK a decade to wake up to the same reality and now it generates tons of cash and pays a high dividend. VG certainly could end up like ELNK and that would be very good for investors buying in at $1.50. As long as they don't do anything stupid that results in bankruptcy, VG is a long term buy here with a 3-5 year price target of $5 to $10.

    • From my layman's point, all Vg must do is continue to post inceasing profits, grow customer base, develop technolgy, strengthening and broadening their foundation. Then investors who hold long, can enjoy the benefits of steady PPS over the years, and of course those "pops" in PPS as new features are added, and/or parterning or buyout develops. Seems like a win-win to me.
      It takes dicipline, but I am holding.

    • why did you have to create a new ID to come and share this with us?

    • I am a happy TeleBlend customer for a while. The stuff works, they are a small company and I know the management isn't getting paid to fly around in their private jet like Lefar. Lefar is just bleeding the company dry. When the original posse take a back seat, that is a sign.

    • yes you have to have patience and planning to ride out ups and down

    • I agree! I am in for the long hall and this stock will go to at least$3 in the year or will be bought out. Not too many good VOIP carriers.

    • kudos

6.55+0.03(+0.46%)Nov 27 1:02 PMEST