The Five Dumbest Things on Wall Street This Week
1. How Do You Spell 'Stupid?' V-O-N-A-G-E
Vonage (VG) is getting one ringing endorsement after another.
Shares in the Internet-phone-service provider have dropped 42% since their May 24 initial public offering amid customer complaints and investor apathy. In response, the Holmdel, N.J., company is turning on the public relations charm.
"Vonage Named Best VoIP Service of 2006 by PC World," reads the headline on one recent press statement. "Vonage Receives Effie for Advertising Effectiveness," says another.Vonage certainly isn't taking home any trophies for communicating with Wall Street. Late last Thursday, the company said the Federal Trade Commission (FTC) had closed its investigation of Vonage's 911 disclosures and compliance. That might have qualified as good news -- except that it wasn't true. "Vonage has not ... received a closure letter from the FTC," Vonage explained in a correction notice after the market closed Friday. "Until the Company receives such letter, the FTC's inquiry into this matter remains open." It's hard to know what Vonage was thinking by jumping the gun on the FTC. Luckily, the company explains its strategy in the Effie award release. "Vonage's 'People Do Stupid Things' marketing campaign, which highlights some dumb things that people do, turned out to be a very intelligent brand direction for us," CEO Mike Snyder says. "It educated consumers on the new VoIP category, while urging consumers not to be stupid when selecting their phone service." Don't worry, consumers. Vonage has the "being stupid" part covered. Dumb-o-Meter score: 93. Great brand direction, guys. To view Colin Barr's video take on Vonage's entry in Five Dumbest this week, click here.
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