Vonage IPO Update

Vonage (NYSE: VG) shares have fallen 24% from 17.25 to 13.00 since the introduction of VG to the stock market on Wednesday.

Stock traders and investors are pricing in increased VOIP competition and high marketing costs, driving down the price. The future does not look so bright for Vonage. Some analysts believe Vonage IPO was overpriced, with many believing the price should have been around $10 per share.

The Vonage IPO has been the worst introduction this year, falling 13% on it’s first day of trading, and falling 24% total in two days of trading. Not very impressive.

I personally don’t like any VOIP stocks, mostly due to heavy competition. I am going to stay away from VG.

What is your prediction: are the markets in the middle of a correction, or will the markets be heading substantially lower?

My opinion is that this massive sell off we are seeing is more than a correction, I believe the markets are heading significantly lower. I see NASDAQ bouncing between 2100 to 2200 for 2-4 weeks. I do not think NASDAQ will hit 2000, but breaching 2100, in my opinion, seems possible and likely.

NASDAQ 2 Year Chart:

Dow 2 year Chart:

S&P 500 2 year Chart:

What is your prediction regarding the market action we are seeing around the world right now?

I have also created a new forum thread at the Enhanced Trader Forums: Prediction: Market Correction or Big Market Decline? Share your predictions and thoughts about the action we are seeing in the stock markets.

Baidu.com (Ticker: BIDU, Market: NASDAQ) has released first quarter earnings Wednesday morning, beating estimates with soaring profits and an expanded customer base. BIDU stock price has jumped up +17.74 (28.90%), currently trading at 79.12 per share.

For the quarter through March, the Beijing-based company said it earned 35.2 million yuan ($4.4 million; euro3.5 million), or 1.02 yuan per share (13 cents per American depositary share). A year ago, the company earned just 2.5 million yuan, or 0.08 yuan per share.

Sales tripled to 135.6 million yuan ($16.9 million), compared with last year’s 45.7 million yuan.

I had previously mentioned BIDU on April 5th, in my article: Eye on China Internet Stocks, at which point BIDU was trading at 55.50 per share. Since my original article on April 5, BIDU has soared +23.62 (42.56%).

Vonage (Ticker: VG Market: NYSE) will be traded on the NYSE stock market in a few short weeks. Vonage provides VOIP services, allowing you to make phone calls using your broadband cable modem or DSL internet connection, generally providing phone services cheaper than non-VOIP telephone providers. Vonage offers unlimited calls to anywhere in the U.S., Canada, Puerto Rico, and Europe for $24.99 per month.

Here is some information regarding the upcoming Vonage (Ticker: VG, Market: NYSE) initial public offering (IPO):

Vonage Holdings (VG)
Expected Date: Week of 5/22/2006
Price Range: $16.00 - $18.00
Shares Offered: 31.3 mm
Business: A leading provider of broadband telephone services. A Voice-Over-IP (VOIP) provider.
Industry: Telecomm-Cellular
Employees: 1393
Founded: 2000

I have heard Vonage is offering its customers the ability to buy shares of the stock before it is traded in the markets. I cannot verify this information as of yet, but once I can confirm or deny this I will let everyone know. A current Vonage customer has told me this information but I have not yet seen any written documentation. I will update this story as more information becomes available.

Nymex to Open Sinapore Office

Wednesday May 10, 2:01 am ET

New York Mercantile Exchange to Open Singapore Office

SINGAPORE (AP) — The New York Mercantile Exchange (Nymex), the world’s largest energy-futures marketplace, will open an office in Singapore on May 17, the company said in a statement late Tuesday.

My opinion: I think an office in Asia will encourage an increase in Asian futures traders. Any increase in the number of traders and capital should bring greater volatility to oil, gas, and other energies futures. More traders and capital brings more futures speculation. After the Nymex Singapore Office has a change to grow and develop, we could see greater price fluctuations in oil and gas futures prices - greater than the ones we have recently been seeing.