Vonage Spikes, Bemuses Market Watchers

Shares of VoIP pioneer Vonage were driven up in value yesterday, and they were on a tear again early today.

The problem is, nobody seems to know why the shares are surging. Some speculate that the stock’s recent upward mobility relates to strong adoption of its recently expanded “Vonage World” international-calling service. The service went from availability to 13 countries to applicability for calls to 73 countries — with India, China, and Mexico now covered.

It’s entirely possible that the expanded “Vonage World” is experiencing a spike in adoption. But I suspect we’re seeing an old-fashioned momentum rally here.

Nothing essential has changed for Vonage, and it faces the same intractable business challenges and competitive threats that were arrayed against it last week.

I’ll advise the independent investors in our midst to follow the same advice Sergeant Phil Esterhaus proffered to his fellow officers in the squad room of Hill Street Blues: “Hey, let’s be careful out there.”

4 responses to “Vonage Spikes, Bemuses Market Watchers

  1. I can’t help but wonder if this is related to Vonage’s confidential plan to the NYSE April 27 explaining how they were going to get the stock back above $1. Maybe that plan had a 4 month deadline, and this is just a massive case of stock price manipulation in advance of that date.

  2. Not sure whether I should pocket my gains here or whether I should stick around to see if these unfounded gains will go higher. Any thoughts?

    • Terrence,

      Only you know when you boarded that thrill ride. When you paid for your ticket, how high did you expect it to go? If you’ve already gone past that point, you might want to get out with realized gains rather than live to regret not making a timely exit. Of course, it it continues to surge tomorrow, you’ll regret not staying aboard. But if you’ve already made good money, take your profits.

      The company is preparing a statement, presumably regarding the stock’s stratospheric advance, so tomorrow morning could be very interesting.

  3. Thanks for the responses to my original question. I did end up selling for a good sized gain and this was always my goal. Now to decide where to invest the proceeds.

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