Vonage Files for IPO, Hires New CEO

Vonage filed for an IPO on Wednesday, hoping to raise a quarter-billion dollars in investment capital as well as announcing the hiring of a new CEO. Mike Snyder, formerly president of security firm ADT, will take over February 27 replacing founder Jeffrey Citron.

Niether the amount of shares nor a price range were offered in the company's SEC filing, however the announcement ends months of speculation that the company was planning to go public. The company has more than 1.4 million customers, however still has not turned a profit in the extremely competitive VoIP industry.

The company has spent heavily to acquire subscribers, and its prospectus shows an average expenditure of $214 USD per customer. It only costs Vonage $8.31 USD per customer to provide service, a third of the $24.99 USD monthly fee it charges its customers.

Even with the high profit margin, it was not enough to offset the company's huge marketing costs. The company reported a net loss last quarter of nearly $190 million, noting that it would continue to postpone profitability in favor of gaining new subscribers.

"While this strategy will have the effect of delaying or preventing us from generating net income in the near term, we believe that our focus on growth will better position us as a strong competitor in the long term," the SEC filing reads.