Scenario: Gene One Generic Benchmarking
Vonage is a leading provider of broadband telephone services with over 2.5 million subscriber lines as of February 1, 2007. Based in Edison, New Jersey, Vonage offers services to subscribers throughout the United States. It expanded into Canada in April 2004, and into the United Kingdom in early 2005. Vonage CEO Jeffery Citron has lead his R&D teams in conducting breakthrough telecommunications research in order to make the product a major success. They currently have award-winning technology which enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. Vonage is a company which offers phone service that implements VoIP (Voice-Over-Internet-Protocol) technology. There are two major reasons to use VoIP: lower cost and increased functionality. Vonage CEO Jeffery Citron states that, "the real question is whether the company can acquire its customers in an efficient manner and thereby narrow its losses". Offering an IPO can create much needed cash flow for a company to move itself forward into the marketplace. However, going public is not always the sure way to go. Vonage went public on May 24, 2006 at a price of $17 a share. Prior to the IPO, Vonage solicited its customers via automated phone call announcements and emails with an offer to buy shares of the IPO. The price fell $2.15, closing at $14.85 on the New York Stock Exchange. Vonage's IPO was the worst trading day for any IPO in 2006 up to that point. Vonage proved skillful at selling consumers its money-losing stock. That created a problem for Vonage because it used its IPO to turn happy customers into disgruntled shareholders (Vonage, 2006). It is unusual and risky for a company to so ...