As far as why this matters, it would seem that a traditional AARP member is still married to the landline telephone that they have had since before they can remember. Vonage is offering AARP’s more than 37 million members a unique discount offer on Vonage home phone service with international long distance calling. This also targets AARP members living in the United States or internationally.

The World AARP Member Plan is offered at $21.99 per month, plus taxes and fees. Vonage is also offering a 15% savings exclusively for AARP members with unlimited calling to more than 60 countries with a savings of $590 on average when compared to major carriers.

Vonage’s total subscriber lines were recently listed as follows:

• 2,365,524 as of 9/30/2012
• 2,356,084 as of 6/30/2012
• 2,388,721 as of 9/30/2011

As far as what to expect from this, well it seems that the market is still not willing to assign much of a premium to it at all. Shares are down a penny at $2.26 on the day with light trading volume. Vonage has traded in a 52-week range of $1.63 to $3.16 and its market cap is $499 million.

JON C. OGG

In the press release it shows that New Enterprise Associates (NEA) is an early venture capital investor in Vonage and that New Enterprise has distributed some 5.8 million shares of Vonage common stock out to its limited partners of its funds.

It is important to differentiate one issue here from a sale and an exit. The press release shows that NEA remains a significant Vonage shareholder. If you look through the most recent SEC filings, it appears that the total shares held by New Enterprise were about 14.06 million shares. This also compares to some 27.9 million shares held by nonexecutive chairman Jeffrey Citron.

Another consideration is that a distribution does not assure that all shares will be sold into the market. It is very likely that some will be sold, but insiders often take months or years to “leg out of” a position where they were insiders.

Vonage shares trade more than 1.6 million shares on an average day, so this potential sale does not even count for the volume seen in four trading days. If this was going to be worse, shares would be down more than 4% on the news. The $2.30 share price compares to a 52-week trading range of $1.63 to $3.52.

JON C. OGG

Among the major movers at around noon today are Seanergy Maritime Holdings Corp. (NASDAQ: SHIP), Cybex International Inc. (NASDAQ: CYBI), China Sky One Medical Inc. (NASDAQ: CSKI), Christopher & Banks Corp. (NYSE: CBK), and Vonage Holdings Corp. (NYSE: VG).

Seanergy is up nearly 25% at $3.63. Volume is already about 25x the daily average of around 18,000 shares traded. The dry bulk shipper reported an unexpected profit this morning.

Cybex is up nearly 22% at $1.85 after posting a new 52-week high of $2.01 earlier this morning. Volume is about 8x the daily average of around 50,000 shares traded. The sporting goods maker posted better-than-expected earnings this morning.

China Sky One is down more than -28% at $1.10. Volume is nearly 10x the daily average of about 285,000 shares traded. The nutritional supplement company’s shares have been stopped following the resignations of 26 managers and the reported illness of the CEO.

Christopher & Banks is up more than 11% at $2.52. Volume is about double the daily average of 223,000 shares traded. The clothing retailer is leading the retail sector bump today.

Vonage is down nearly -14% at $2.35. Volume is 6x the daily average of about 1.2 million shares traded. The Internet phone company reported in-line fourth-quarter revenues and earning, but projected higher expenses in 2012.

Paul Ausick

There are several stocks trading more heavily than usual this morning, and also experiencing large gains or drops in share prices. These include the Guggenheim Solar ETF (NYSE: TAN), Seanergy Maritime Holdings Corp. (NASDAQ: SHIP), Dean Foods Co. (NYSE: DF), Vonage Holdings Corp. (NYSE: VG), Znyga Inc. (NASDAQ: ZNGA), and Wellcare Health Plans, Inc. (NYSE: WCG).

The Guggenheim Solar ETF completed a 1:10 reverse split this morning, causing some issues with online finance sites. We have more coverage here.

Seanergy is up nearly 22% at $3.55. Volume is already about 10x the daily average of about 18,000 shares traded. The dry bulk shipper reported an unexpected profit this morning.

Dean Foods is up nearly 13% at $12.25. Volume is already 150% of the daily average of 1.9 million shares traded. The food and beverage company posted better-than-expected earnings this morning and offered guidance in-line with expectations.

Vonage is down more than -12% at $2.40 after posting a new 52-week low of $2.38 earlier. Volume is already approaching double the daily average of about 550,000 shares traded. The Internet phone company reported in-line fourth-quarter revenues and earning, but projected higher expenses in 2012.

Zynga is down nearly -12% at $12.65. Volume is already higher than the daily average of around 14 million shares traded. The social gaming company posted better-than-expected earnings this morning, but the forecast for the current quarter was weak and several analysts downgraded the stock.

Wellcare is up more than 11% at $70.13 after posting a new 52-week high of $71.54 earlier this morning. Volume is already double the daily average of about 510,000 shares traded. The managed care provider beat earnings expectations this morning and provided a better-than-expected forecast for 2012.

Paul Ausick

The unofficial closing bells put the DJIA up more than 52 points to 12,150.13 (0.43%), the NASDAQ fell more than 6 points (-0.23%) to 2,649.56, and the S&P 500 rose 0.11% or nearly 5 points to 1,258.47.

There were several analyst upgrades and downgrades today, including Altria Group Inc. (NYSE: MO) started as ‘buy’ at Deutsche Bank. Other ratings action include Verizon Communications Inc. (NYSE: VZ) reiterated as ‘buy’ with a $44 price target at Argus; Tesoro Corp. (NYSE: TSO) cut from ‘outperform’ to ‘neutral’ with a $34 price target at Credit Suisse; LinkedIn Corp. (NASDAQ: LNKD) raised to ‘overweight’ at JPMorgan; and General Electric Co. (NYSE: GE) raised to ‘outperform’ by Berstein.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Chesapeake Granite Wash Trust (NYSE: CHKR) is up 0.7% at $19.94; Blyth, Inc. (NYSE: BTH) is down -0.05% at $66.33; Pep Boys-Manny, Joe, and Jack (NYSE: PBY) is down -5.5% at $11.21; Uranium Energy Corp. (AMEX: UEC) is up 0.66% at $3.06; AutoZone Inc. (NYSE: AZO) is down -0.12% at $338.56; Darden Restaurants Inc. (NYSE: DRI) is down -12% at $41.95; Toll Brothers Inc. (NYSE: TOL) is up nearly 3% at $21.37; and Liquidity Services Inc. (NASDAQ: LQDT) is up nearly 5.5% at $36.74, after posting a new 52-week high of $37.05 earlier in the day. Earnings releases coming after markets close today include Diamond Foods Inc. (NASDAQ: DMND); SAIC Inc. (NYSE: SAI); and Vera Bradley Inc. (NYSE: VRA).

Several other standouts from today are as follows…

Frontline Ltd. (NYSE: FRO) is up more than 19%, to $4.23. The oil tanker company has been suffering from low day rates and lack of cargoes, but today’s injection of $500 million from a Norwegian bank controlled by the company’s major shareholder, John Fredriksen, has pumped up interest in the stock.

Cell Therapeutics, Inc. (NASDAQ: CTIC) is up 14%, at $1.31. The drug-maker received notice from the FDA that its new drug application for a treatment for non-Hodgkins lymphoma is complete.

Comstock Resources Inc. (NYSE: CRK) is up nearly 15%, at $19.39. The oil & gas E&P company has acquired new acreage in the Delaware Basin of west Texas and reported that it had drilled five new producing wells in its Eagle Ford shale acreage.

Vonage Holdings Corp. (NYSE: VG) is down nearly -5%, at $2.52. The VoIP provider did not report any significant news, but the stock has been quite volatile over the past month.

Hecla Mining Co. (NYSE: HL) is up more than 9%, at $6.57. The miner benefited from today’s investors’ interest in gold mining stocks.

Stay tuned for Wednesday. We have noted Federal Reserve Governor Sarah Bloom Raskin moderating a panel on grass-roots participation at Baltimore branch of Richmond Fed. Here are other noteworthy events scheduled for Tuesday (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 10:30 a.m. – EIA weekly petroleum status report
• 3:00 p.m. – Report on outstanding consumer credit

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The unofficial closing bells put the DJIA up nearly more than 177 points to 11,835.74 (1.52%), the NASDAQ rose more than 33 points (1.27%) to 2,639.98, and the S&P 500 rose 1.61% or more than 19 points to 1,237.89.

There were several analyst upgrades and downgrades today, including American Water Works (NYSE: AWK) added to Zack’s Strong Buy List. Citigroup Inc. (NYSE: C) and JP Morgan Chase & Co. (NYSE: JPM) cut to ‘hold’ at S&P Capital IQ; Caterpillar Corp. (NYSE: CAT) started at ‘overweight’ at Morgan Stanley; Deere & Co. (NYSE: DE) started at ‘underweight’ at Morgan Stanley; and Valero Energy Corp. (NYSE: VLO) reiterated ‘buy’ at Argus with a price target of $35.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Phoenix Companies Inc. (NYSE: PNX) up more than 27%, at $1.73; Noranda Aluminum Holding Corp. (NYSE: NOR) is up more than 21%, at $10.44; hhgregg, Inc. (NYSE: HGG) up more than 16%, at $14.09; Career Education Corp. (NASDAQ: CECO) is down nearly -467%, at $8.38, a new 52-week low; Endeavor International Corp. (NYSE: END) is down nearly -14%, at $7.66; and Vonage Holding Corp. (NYSE: VG) is down about -15%, at $2.65.

Several other standouts from today are as follows…

Career Education Corp., in addition to posting an awful quarterly report, also got hit by the resignation of the company’s CEO. Shares are down more than -47%, at $8.38, to give the shares a new range of $8.68-$27.60.

Amyris Corp. (NASDAQ: AMRS) is down more than -20%, at $15.41, having posted a new 52-week low earlier to give the stock a new range of $15.21-$33.99. The company’s earnings report revealed an EPS loss of -$0.97, much worse than expected. Shares were downgraded by Robert Baird from ‘outperform’ to ‘neutral’.

Diamond Foods, Inc. (NASDAQ: DMND) is down more than -17%, at $53.01, in a 52-week range of $43.14-$96.13. The company’s board is reviewing how walnut growers are being paid and will delay the annual report into next year. The company’s deal to by Pringles snack foods from Proctor & Gamble (NYSE: PG) could be in jeopardy because the company planned to use stock to make the acquisition.

Sino-Global America Shipping, Ltd. (NASDAQ: SINO) is up more than 81%, at $3.05, in a 52-week range of $1.20-$9.16. The company has signed a memorandum of understanding with a South African firm to act as Sino’s agent in that country. In shipping these days, any positive signal is a rare treat.

Oxigene, Inc. (NASDAQ: OXGN) is up nearly 12%, at $1.69, in a 52-week range of $0.82-$6.38. The company has set its third-quarter earnings release for next week, and investors are expecting good news on the company’s drug development efforts.

Rentech, Inc. (AMEX: RTK) is up about 21%, at $1.95, a new 52-week high, and a new 52-week trading range of $0.72-$1.95. The company continues to get a boost from the IPO of its spin-off of Rentech Nitrogen Partners, L.P. (NYSE: RNF).

Stay tuned for Thursday.  We have noted the following events (all times Eastern):

• 8:30 a.m. – Initial unemployment claims
• 10:00 a.m. – Factory orders
• 10:30 a.m. – EIA Natural gas report
• 4: 30 p.m. – Federal Reserve Balance Sheet

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Gross line additions increased and the company showed that churn was slightly higher than expected because of the no contract policy.  Vonage noted for ahead, “We expect improvements over the next few months as we will no longer experience the churn spike customarily associated with contract expirations. We anticipate stable to lower churn in the fourth quarter.”

The company also noted that it is focused on international expansion, but more importantly it noted that it expects to announce its first partnership early next year.  Vonage now set the stage that it must announce a deal in early 2012.

The real problem is that Vonage has just found it very difficult to grow.  The company ended with 2,388,721 net subscribers lines, down from 2,397,660 at June 30, 2011 and also down from 2,399,035 as of September 30, 2010.  More details are as follows:

• Gross line additions were 170,000, up from 163,000 the prior year and 158,000 sequentially;
• Net loss of 9,000 lines, compared to a loss of 5,000 lines in the year-ago quarter and 11,000 net line losses sequentially. 
• Churn was 2.7%, up from 2.4% in the year ago quarter and 2.5% sequentially; expects fourth quarter churn to be at or below third quarter levels.

As far as guidance goes, the company expects to achieve adjusted EBITDA of at least $165 million for the year 2011 and is also expects to report gross line additions that exceed prior year levels.  Vonage now sees full year churn of about 2.6%, at the high-end of its previous guidance of the “mid-2% level.”  Full year 2011 net line additions are likely to be slightly negative.  Capital expenditures for the year are expected to be at or under $40 million. 

Vonage shares are down 12% at $2.75 versus a $3.13 close and the 52-week trading range is $2.10 to $5.39.  Unless Vonage can figure out a way to get some growth going again, this stock is likely to keep bouncing around back and forth.

JON C. OGG

Even if you back out the adjusted figures, the net income was $0.09 EPS or $22 million versus a $1 million net loss a year ago.  The VoIP telephony outfit has managed to keep its costs from rising, and it is projecting that its gross subscriber line additions will grow in 2011 and that it should have $165 million in reported EBITDA.

Along with revenues, there are still some concerns that need to be addressed.  The ARPU, or average revenue per user, came down to $30.14 from $30.71 in year-ago quarter.  The company’s gross line additions came to 158,000, but the net came to a loss of 11,000 lines as the churn increased to 2.5%.  This is too high of a churn.  The company sees 2011 churn in the “mid two percent range.”  Vonage ended with 2,397,660 subscriber lines at June 30.

Marketing costs are also higher, another concern.  This was $52 million versus $49 million a year ago and sequentially.  The key measure of subscriber line acquisition costs also ticked higher to $330 from $318 a year ago and from $282 sequentially.

Microsoft Corporation (NASDAQ: MSFT) has become the number one problem here.  The acquisition of Skype is THE biggest pressure.  The threat from Google Inc. (NASDAQ: GOOG) and its free inter-call features is one thing, but unleashing Microsoft on the domestic and global phone market is much more concerning with the Facebook integration that if Skype had just gone public and struck its own deals.  Skype had an average of 145 million connected users per month in the fourth quarter of 2010.

VocalTec Communications Ltd. (NASDAQ: CALL) continues to be a threat as well with its magicJack low-cost phone line service, which has sold more than seven million magicJack device since the launch in 2008.

8×8 Inc. (NASDAQ: EGHT) remains a competitor in VoIP, but the reality is that this $32 million market value is just not in the same league even if it claims more than 25,000 businesses using its VoIP, video conferencing, and unified communications services.

The gain is that Vonage’s operating expenses came down by a factor of 7% in the quarter.  The cost per line was cut to $8.03, down from $8.34 sequentially and down from $8.72 a year earlier.  Another boost may come with some mixed results at first but should pay off.  The company is effectively doubling its store distribution channel to 6,000 spots.  That will raise costs but will help to boost sales, at least it would seem to be the case.

Another boost is coming from a debt refinancing.  It has cut what appears to be some $43 million annually due to a LIBOR-plus-3.50% pact.  That is a saving which makes up for many losses elsewhere.

Along with a retail distribution expansion, the company has launched its global pay-per-call application for the iPhone as well.  That means that as long as you can get a wireless connection, you can use your iPhone whether your phone can travel and be carrier-compatible globally or not.

Vonage shares are up 1% after an hour of trading at $3.75 after having hit $3.88 earlier today. The 52-week trading range is $1.92 to $5.39, and the stock was down almost 30% since its report in early May.  The market cap is now $830 million.

The report was taken as a positive one despite some obvious concerns.  Now the company just has to worry about an eight-day losing streak turning into nine days, as well as that heavy competition.

JON C. OGG

Brocade Communications Systems, Inc. (NASDAQ: BRCD) saw a big move on Thursday and shares hit a new 52-week high on both Thursday and Friday. Paul Mansky at Canaccord Genuity noted that Dell Inc. (NASDAQ: DELL) should acquire the company and this sent shares off to the races.  The stock was at $6.67 on Wednesday and closed at $7.13 Friday for a gain of about 7%.  When the call was made, the shares traded 5-times normal volume.  Our take: Mansky’s call is one we agree with.

Dendreon Corporation (NASDAQ: DNDN) was given yet another top-call of the week as Goldman Sachs started coverage with a Buy rating and issued a $50.00 price target objective.  Goldman Sachs sees Provenge being a very successful drug in te fight against late-stage prostate cancer.  This flies against a very cautions call recently from Credit Suisse where that firm gave a $29 price target.

DryShips, Inc. (NASDAQ: DRYS) was given a large upgrade by Goldman Sachs and you rarely see analysts upgrade or downgrade this stock.  The firm raised the rating to Buy from Neutral and it raised the price target objective to $6.00 from $5.50.  This is not even a year-high as the 52-week range is $3.28 to $6.44.  The pop on Friday was considerable.  Before the call, DryShips was trading at $3.83 and that implied upside of 56% to that $6.00 target.  The call does not even get too aggressive compared to other research calls as the consensus price target is actually $6.45.

SIRIUS XM Radio Inc. (NASDAQ: SIRI) now has a new street-high target of $2.75 from Zacks.  The rating company also raised its rating to “Outperform” and it was touted as the “Bull of the Day” in the call. More details are here.

Solazyme, Inc. (NASDAQ: SZYM) is the new hot renewable energy company that we noted may have gotten the nanotech sector back on the map.  It has only been public for a week, but Raymond James initiated coverage with an “Outperform” rating and gave it a $25 price target.  This one priced at $18.00, closed at $20.71 on its first day and closed this last Friday at $23.47.  The value and interest around this IPO has also generated close to a 10% higher valuation for holder Harris & Harris Group, Inc. (NASDAQ: TINY).

TASER International Inc. (NASDAQ: TASR) is not one you routinely see coverage in and there is irony here despite a drop of almost 5% for the week.  This week TASER was “Tased” by J.P.Morgan with a downgrade from an already cautious Neutral rating down to a worse “Underweight” rating.  Effectively that is a “Sell” rating but the firm does not have a “Sell” rating in its official coverage.  Oddly enough, there is some irony here.  The price target on the call is $5.00, so there is actually an implied upside of almost 13% from Friday’s close of $4.43.

Vonage Holdings Corporation (NYSE: VG) is one company you rarely see analysts give coverage on.  This week came a report from Janco Partners, initiating coverage with a “Buy” rating and a $6.00 price target.  Janco’s report is based upon growing penetration of the ILD market, which it thinks will help with the churn rates and will help increase EBITDA margins.  Also noted was that Vonage’s free cash flow profile should improve considering the capex is flat around $40 to $50 million, which should help the company pay down debt.  Because the market was soft this did not create a massive run, but shares the prior Friday were at $4.67 and the close on Friday was $4.80.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Atmel Corporation (NASDAQ: ATML) Reiterated Buy and $17 target at Gleacher & Co.
Comerica Incorporated (NYSE: CMA) Reiterated Buy at BofA/ML.
Cracker Barrel Old Country Store Inc. (NASDAQ: CBRL) Cut to Hold at Argus.
Dendreon Corporation (NASDAQ: DNDN) Started as Buy at Goldman Sachs.
DeVry, Inc. (NYSE: DV) Raised to Buy at BofA/ML.
Education Management Corporation (NASDAQ: EDMC) Raised to Neutral at BofA/ML.
General Mills, Inc. (NYSE: GIS) Cut to Neutral at UBS.
Gold Fields Ltd. (NYSE: GFI) Raised to Overweight at Morgan Stanley.
Imperial Sugar Co. (NASDAQ: IPSU) Raised to Buy with $30 target at Janney Capital.
Janus Capital Group Inc. (NYSE: JNS) Reiterated Underperform but cut target to $11 at BofA/ML.
Lender Processing Services, Inc. (NYSE: LPS) Cut to Underperform as Bear of the Day at Zacks.
Mechel OAO (NYSE: MTL) Started as Buy at UBS.
Medco Health Solutions Inc. (NYSE: MHS) Reiterated Buy with $69 target at Argus.
Melco Crown Entertainment Ltd. (NASDAQ: MPEL) Reiterated Buy and raised target to $13.30 at Citigroup.
Quality Distribution Inc. (NASDAQ: QLTY) Started as Neutral at Credit Suisse.
Signet Jewelers Limited (NYSE: SIG) Maintained Strong Buy as Value at Zacks.
SIRIUS XM Radio Inc. (NASDAQ: SIRI) Raised to Outperform as Bull of the Day at Zacks.
Vonage Holdings Corporation (NYSE: VG) Started as Buy at Janco Partners (Wednesday).
Zumiez, Inc. (NASDAQ: ZUMZ) Cut to Neutral at Janney Capital.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG