Monday, March 26, 2007

Least Helpful Call Today…So Far

The least helpful call from Wall Street’s Finest thus far today is most certainly the downgrade of Vonage, that Poster Child of Failed Initial Public Offerings whose stock closed at $3.00 on Friday—a rather dramatic discount to its 52-week high and IPO price of $17.25—from “Peer Perform” to “Market Perform” by one of Wall Street's Bigs.

Stated reason for the downgrade? “Too Many Risks.”

No, I am not making that up; and yes, the morning is still young.

Nominations for even less helpful calls than that are welcome.

Jeff Matthews
I Am Not Making This Up

© 2007 Jeff Matthews

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.


michael said...
'Todd Shipman, energy analyst at S&P, talks about Enron's near-term outlook and explains why his company lowered its credit rating.'

Sam E. Antar said...


It appears that he can spell, but can he write too.

I don’t mean English composition skills.

Rather, I am referring to accurate reports.

If Vonage went public at $17.25 per share and it is now trading around $3 per share this guy is late in the game with his down grade.

How about a more concise reason, but a more accurate one?

It stinks.

Here, I used two words.

Am I more helpful?


Sam E. Antar (former Crazy Eddie CFO & convicted felon)

PS: Jeff, sometimes it’s not the amount of words that help. It’s better just to get it right. I too, am not making this up.

Disclaimer: This post is no way meant to imply my views on the current market valuation of Vonage. This post is for illustration purposes.

Am I making this disclaimer up?

SiamTwin said...

And another helpful downgrade to Sell (from Hold) Tuesday by Citigroup -- "...the risk to the company's profitability has increased..."

Sounds like we're near a potentially lucrative entry point on the long side...

Ed said...

I know that analyst very well - he supported the IPO valuation in the internal discussions prior to launch (even though he is not legally allowed to publish for some period of time post IPO).

And for what it is worth - he is the guy who replaced Grubman (another famous SSB/Citi telecom analyst).

Lee_D said...

These analysts went to school to learn how to do this, right?

Rust said...

What analysts do not seem to be focusing on is how these patent infringements may affect other VOIP carriers. Vonage isn't doing anything all that unique. If they are found to be in violation of Verizon patents, it will likely effect many other companies - Vonage is simply the most visable

/mr said...

How about the last line in this report on FNET:

We continue to assume no new revenues from any new devices in 2007 and continue to believe there is ~$5.50 of premium in the share price at current levels, which we leave up to investors to decide if it is too much or too little given the uncertainties around the revenue generation potential from any new device, even if approved. We are maintaining our Hold rating.

We leave it up to investors! I love it.