Reported Vonage IPO a prelude to merger?

Today, we link to a Reuters news wire report noting a Wall Street Journal story citing original reporting from The Deal business newspaper that Vonage is planning an Initial Public Offering of up to $600 million in stocks within the next six weeks.There are two reasons for this IPO.

Today, we link to a Reuters news wire report noting a Wall Street Journal story citing original reporting from The Deal business newspaper that Vonage is planning an Initial Public Offering of up to $600 million in stocks within the next six weeks.

There are two reasons for this IPO. One obvious, the other less obvious but certainly more compelling.

The obvious reason for such an IPO as a way to raise money in the capital markets for the needed expansions, infrastructure improvements and marketing push Vonage will need to invest in to keep ahead of a fast-moving pack of challengers.

This morning, I noticed on the Vonage Forum that they have a thread featuring the story. If you read the piece, you'll note that The Deal reports that according to sources Vonage might also explore a potential merger.

One thing about mergers: when your company is priced by the markets, it takes some guesswork out of the valuations that an acquiring company would pay for it.

I know I'm repeating myself, but that company oughta be Sprint. I wrote this back in April, and I still believe it now.

 

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