Vonage Hope Vaporizes

The flop of the Vonage(VG Quote) IPO is only the beginning of the troubles facing the Internet phone company.

Shares of Vonage opened with a thud Wednesday. Vonage posted the biggest decline of any IPO during its first day of trading this year, according to the research firm Deallogic. Shares fell 13% to $14.85 after pricing late Tuesday at $17.

"People may have been hesitant to buy into a hyper-growth company losing so much money," says James DeStefano, an analyst with Renaissance Capital, which invests in IPOs. "People are looking longer term at the risks of this company, at the growing competition." ...