Beware of hyping hype itself

Tim Mullaney

Calvin Coolidge, or so legend says, told a friend once that when he saw 10 problems coming down the road he didn't worry -- eight were sure to run into a ditch before getting to him. The same is true of the IPO market: At every filing of a speculative IPO, someone's sure to do a story about speculative excess coming back. I've kinda, sorta done it myself. But we're always wrong.

Which brings us to Vonage Holdings (SG), the Internet phone company that would like to go public in a $500 million to $600 million deal that values the money-losing VOIP leader at nearly $3 billion. Vonage has been held up as the proof that speculative excess is back, but the stance here has been that the deal would run into the ditch before you had to sit your elderly Mom down and insist she not buy it. According to former VC and Wall Street deal maven Andy Kessler, that's apparently happening now.

Repeat: We have learned our lesson. We have learned our lesson. If you want to sell a money-losing (and, apparently, getting worse) startup these days, the place to do it is not Wall Street.

Before it's here, it's on the Bloomberg Terminal.