In the May 2021 Insider Report, I shared that hedge fund Jana Partners acquired a stake in Vonage. It’s nice to see institutional investors get excited about the potential of a stock, but Jana had a different idea.
Bloomberg reported that Jana Partners wants to hire advisors to explore selling Vonage in parts. Oh brother.
It’s right out of the movies - let’s say Pretty Woman. Bitter, unhappy Edward Lewis (played by Richard Gere) raids companies for parts - in the first half. Edward realizes that building companies is more rewarding - that and getting the girl make for a happy ending.
That playbook certainly can work, but UCaaS is all about convergence. What started with voice, has expanded into team chat and meetings, and appears to be converging with CCaaS and CPaaS. Hey, that’s what Vonage has!
2016-2019 Vonage acquired pieces to make a stronger whole. Over the past 18 months the company built a new leadership team that appears focused on implementation - as demonstrated with quarterly results. Meanwhile, many other providers are now making acquisitions to expand their UCaaS offers.
It’s odd that investors would buy into a company to reverse its accomplishments and buck an industry trend. I have to believe there are more logical companies to split up. Perhaps Kohler and its divisions for plumbing fixtures, power systems, and golf courses?
