Vonage reported fourth quarter 2007 results, and had somewhat positive news, but with one big looming issue. They posted gains in subscribers and revenues, and had a substantially lower loss of $11 million dollars, compared with $117 million from the previous year. In fact their financial metrics beet most Wall Street analyst expectations. But there are serious concerns among analysts having to do with Vonage’s debt. They have a $250 million debt payment that may come due by the end of the year. Given the overall market’s credit crunch, Vonage could have an extremely difficult time refinancing that debt. They are in no position to pay it off outright. According to an article in Forbes magazine, “the company’s auditors said they will include a going-concern statement in Vonage’s annual report to investors, if the company’s doesn’t refinance by the time the report comes out.” Ouch!
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