Vonage Holdings Corp. (VG-NYSE) announced that Michael Snyder has (FINALLY) stepped down from his position as CEO and resigned from the Company’s Board of Directors effective April 11, 2007. Jeffrey Citron, Chairman, has been appointed as the interim CEO and is expected to serve on a short-term basis. Vonage will also begin a search for Mr. Snyder’s replacement.
The Company also announced its preliminary estimation of its operating and financial results for the quarter ended March 31, 2007: Total Revenue $195 million (versus estimates of $197.5M); Gross Subscriber Line Additions 332,000; Net Subscriber Line Additions 166,000; Average Monthly Customer Churn 2.4%;Marketing Cost per Gross Subscriber Line Addition $275.
Cost Cutting: Vonage announced plans to reduce its marketing expense byapproximately $110 million and now expects marketing expenditures ofroughly $310 million for 2007; and plans to reduce its G&A by $30million through the remainder of 2007 through consolidation ofoperations and workforce reduction.
Shares are actually UP almost 4% pre-market after closing at $3.00yesterday. We probably don’t need to remind anyone how ugly this onehas been since the trading range is now $2.88 to $17.25 after the IPO.This just shows what the street does when a bad CEO leaves. Maybe thecompany will decide to stop sending out "positive" emails every timethere is bad news out, too.
Jon C. Ogg
April 12, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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