Another VOIP Provider Files For IPO

As I suspected IPO filing activity continues to increase. Now I don't want my blog to focus too much on IPO filings so I am selective about the ones I write about, but this week another VOIP provider, InterMetro, has filed its S-1. When I previously said in my last post about the DivX IPO, that things were heating up and the quality of offerings seemed to be declining, I wasn't kidding. InterMetro's filing shows that they are a young post-bubble company that started offering VOIP services in March 2004. How can a money losing one year old company expect to tap the public markets and thrive? This is scary!

The VOIP space is indeed turning out to be "Web 2.0's" fertile ground for liquidity. I have posted about the evolution of this space previously. It started with the acquisition of Skype by Ebay. Then Gizmo's commercialization and VOIP wars between Skype and Gizmo and the introduction of Jajah's service. Then the Vonage filing. And now InterMetro.

I'm not going to waste much space on InterMetro because you all know that this is another company that is trying to strike while the iron is hot. VOIP is hot so you are going to see the floodgates open. I am however a little surprised because EVERYTHING IS GOING SO WELL with the second generation of web companies. There is NO NEED TO SPOIL IT BY CRAPPY IPOS! When you have momentum such as we clearly have since the meltdown, you can't get greedy and take your company public prematurely.

People often forget that even in a free for all marketplace such as the equity capital markets, you are interconnected with everyone else. While the markets are an efficient place that eventually punish and reward according to fundamental merit, they are influenced by emotion and psychology. If you take your company public prematurely you are doing the markets a disservice. People will lose money and not want to come back. You will get punished when you don't perform and then you will make it more difficult for others to go public. This prevents all of those innovative technologies from reaching the hands of the public.

Now maybe I'm being melodramatic. But the underwriters of this IPO, Ladenburg Thalmann & Co and Wunderlich Securities are two no name underwriters who I have never heard of before. Shame on you two no name banks that are trying to make a buck.

So I'm going to skip my rundown on this IPO - it is a one year old company in a highly competitve industry whose losses are increasing as rapidly as its revenues. The only thing I give these guys is that they have some real cajones for filing.

Comments

[anonymous]

I have been using tringotel business line for the past few months. No major complaints about call quality.
Lots of great features and very easy to customize. But, there is no way to set up multiple voicemail boxes. This is unfortunate because I have a partner. You can use an answering machine with multiple boxes instead, but all of the great Voip voicemail features (including. .wav messages to email) are lost. Lingo and vonage might have the same weakness.