SC 13D

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )*

Neutral Tandem, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

64128B108

(CUSIP Number)

Marc Weingarten and David E. Rosewater

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

(212) 756-2000

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

January 30, 2013

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ]

(Page 1 of 19 Pages)

______________________________

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 64128B108 SCHEDULE 13D Page 2 of 19 Pages

1	NAME OF REPORTING PERSON Clinton Spotlight Master Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 865,883 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 865,883 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 865,883 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.7%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 64128B108 SCHEDULE 13D Page 3 of 19 Pages

1	NAME OF REPORTING PERSON Clinton Magnolia Master Fund, Ltd.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 123,950 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 123,950 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 123,950 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.4%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 64128B108 SCHEDULE 13D Page 4 of 19 Pages

1	NAME OF REPORTING PERSON Clinton Relational Opportunity Master Fund, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 175,900 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 175,900 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 175,900 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 64128B108 SCHEDULE 13D Page 5 of 19 Pages

1	NAME OF REPORTING PERSON Clinton Retail Opportunity Partnership, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 494,238 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 494,238 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 494,238 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.5%
14	TYPE OF REPORTING PERSON PN

CUSIP No. 64128B108 SCHEDULE 13D Page 6 of 19 Pages

1	NAME OF REPORTING PERSON Clinton Group, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,659,971 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,659,971 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,659,971 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.2%
14	TYPE OF REPORTING PERSON CO; IA

CUSIP No. 64128B108 SCHEDULE 13D Page 7 of 19 Pages

1	NAME OF REPORTING PERSON George E. Hall
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a) ¨ (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)		¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,659,971 shares of Common Stock
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,659,971 shares of Common Stock
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,659,971 shares of Common Stock
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES			¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.2%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 64128B108 SCHEDULE 13D Page 8 of 19 Pages

Item 1.	SECURITY AND ISSUER
	This statement on Schedule 13D (this "Schedule 13D") relates to the common stock, par value $0.001 per share (the "Common Stock"), of Neutral Tandem, Inc., a Delaware corporation (the "Issuer").  The address of the Issuer's principal executive office is 550 West Adams Street, 9th Floor, Chicago, Illinois 60661.

Item 2.

IDENTITY AND BACKGROUND

(a) This Schedule 13D is filed by: (i) Clinton Spotlight Master Fund, L.P., a Cayman Islands exempted limited partnership ("SPOT"); (ii) Clinton Magnolia Master Fund, Ltd., a Cayman Islands exempted company ("CMAG"); (iii) Clinton Relational Opportunity Master Fund, L.P., a Cayman Islands exempted limited partnership ("CREL"); (iv) Clinton Retail Opportunity Partnership, L.P., a Delaware limited partnership ("CROP"); (v) Clinton Group, Inc., a Delaware corporation, which serves as the investment manager to SPOT, CMAG, CREL and CROP (“CGI”); and (vi) George E. Hall, a United States citizen, who serves as President of CGI ("Mr. Hall" and together with SPOT, CMAG, CREL, CROP and CGI, “Clinton”). (b) The principal business address of CGI, CROP and Mr. Hall is 9 West 57th Street, 26th Floor, New York, New York 10019. The principal business address of SPOT, CMAG, and CREL is c/o Fortis Fund Services (Cayman) Limited, P.O. Box 2003 GT, Grand Pavilion Commercial Centre, 802 West Bay Road, Grand Cayman, Cayman Islands. (c) The principal business of CGI is to provide investment management services to private individuals and institutions. The principal business of SPOT, CMAG, CREL and CROP is to invest in securities. The principal business of Mr. Hall is to serve as President of CGI. (d) None of the Reporting Persons or persons listed on Appendix A has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons or persons listed on Appendix A has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceedings was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Hall is a citizen of the United States. The name, citizenship, present principal occupation or employment and business address of each director and executive officer or general partner, as applicable, of CGI, SPOT, CMAG, CREL and CROP is set forth in Appendix A attached hereto. To the best of the Reporting Persons' knowledge, except as set forth in this statement on Schedule 13D, none of such individuals owns any shares of Common Stock.

CUSIP No. 64128B108 SCHEDULE 13D Page 9 of 19 Pages

Item 3.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

The Reporting Persons used approximately $6,861,000 (including brokerage commissions) in the aggregate to purchase the Common Stock reported in this Schedule 13D. The source of the funds used to acquire the Common Stock reported herein is the working capital of SPOT, CMAG, CREL and CROP for the shares of Common Stock held by each of them, and margin borrowings described in the following sentence. Such shares of Common Stock are held by the Reporting Persons in commingled margin accounts, which may extend margin credit to the Reporting Persons from time to time, subject to applicable federal margin regulations, stock exchange rules and credit policies. In such instances, the positions held in the margin account are pledged as collateral security for the repayment of debit balances in the account. The margin accounts bear interest at a rate based upon the broker’s call rate from time to time in effect. Because other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Common Stock reported herein.

Item 4.

PURPOSE OF TRANSACTION

The Reporting Persons initially acquired beneficial ownership of the Common Stock of the Issuer for investment purposes because they believed the Issuer's Common Stock represented an attractive investment opportunity. The Reporting Persons believe that the Common Stock at current market prices is undervalued. On January 30, 2013, the Reporting Persons sent a letter (the "January 30 Letter") to the Board of Directors of the Issuer (the "Board") outlining the destruction of shareholder value by the current Board and management team. In the January 30 Letter, the Reporting Persons request that the current Board be replaced with independent directors, and express an intent to nominate new directors if the Board fails to do so. The Reporting Persons also suggest that the Issuer sell its Tinet business. A copy of the January 30 Letter is attached hereto as Exhibit 2 and is incorporated by reference herein. The Reporting Persons have, from time to time, engaged in discussions with management and the Board regarding the Issuer's business, management, strategic alternatives and direction, board composition and related matters. The Reporting Persons may continue to discuss such matters with the Issuer's management and Board as well as other stockholders of the Issuer and third parties. Except as set forth herein, the Reporting Persons have no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer's financial position and strategic direction, actions taken by the Board, price levels of the Common Stock, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional shares of Common Stock or selling some or all of their shares of Common Stock, and/or otherwise changing their intention with respect to any and all matters referred to in subparagraphs (a) – (j) of Item 4 of Schedule 13D, including without limitation, seeking Board representation.

CUSIP No. 64128B108 SCHEDULE 13D Page 10 of 19 Pages

Item 5.

INTEREST IN SECURITIES OF THE ISSUER

(a) The aggregate number and percentage of shares of Common Stock to which this Schedule 13D relates is 1,659,971 shares of Common Stock, constituting approximately 5.2% of the Issuer’s currently outstanding Common Stock. The aggregate number and percentage of shares of Common Stock reported herein are based upon the 32,222,896 shares of Common Stock outstanding as of October 31, 2012, as reported in the Issuer's Quarterly Report on Form 10-Q for the period ended September 30, 2012, filed with the Securities and Exchange Commission on November 9, 2012.

(i)	SPOT:
	(a)	As of the date hereof, SPOT may be deemed the beneficial owner of 865,883 shares of Common Stock.
		Percentage: Approximately 2.7% as of the date hereof.
	(b)	1.  Sole power to vote or direct vote: 0
		2.  Shared power to vote or direct vote: 865,883 shares of Common Stock
		3.  Sole power to dispose or direct the disposition: 0
		4.  Shared power to dispose or direct the disposition: 865,883 shares of Common Stock
(ii)	CMAG:
	(a)	As of the date hereof, CMAG may be deemed the beneficial owner of 123,950 shares of Common Stock.
		Percentage: Approximately 0.4% as of the date hereof.
	(b)	1.  Sole power to vote or direct vote: 0
		2.  Shared power to vote or direct vote: 123,950 shares of Common Stock
		3.  Sole power to dispose or direct the disposition: 0
		4.  Shared power to dispose or direct the disposition: 123,950 shares of Common Stock

(iii)	CREL:
	(a)	As of the date hereof, CREL may be deemed the beneficial owner of 175,900 shares of Common Stock.

	Percentage: Approximately 0.5% as of the date hereof.
(b)	1.  Sole power to vote or direct vote: 0
	2.  Shared power to vote or direct vote: 175,900 shares of Common Stock
	3.  Sole power to dispose or direct the disposition: 0
	4.  Shared power to dispose or direct the disposition 175,900 shares of Common Stock

CUSIP No. 64128B108 SCHEDULE 13D Page 11 of 19 Pages

(iv)	CROP
	(a)	As of the date hereof, CROP may be deemed the beneficial owner of 494,238 shares of Common Stock.
		Percentage: Approximately 1.5% as of the date hereof.
	(b)	1.  Sole power to vote or direct vote: 0
		2.  Shared power to vote or direct vote: 494,238 shares of Common Stock
		3.  Sole power to dispose or direct the disposition: 0
		4.  Shared power to dispose or direct the disposition: 494,238 shares of Common Stock
(v)	CGI:
	(a)	As of the date hereof, CGI may be deemed the beneficial owner of 1,659,971 shares of Common Stock.
		Percentage: Approximately 5.2% as of the date hereof.
	(b)	1.  Sole power to vote or direct vote: 0
		2.  Shared power to vote or direct vote: 1,659,971 shares of Common Stock
		3.  Sole power to dispose or direct the disposition: 0
		4.  Shared power to dispose or direct the disposition: 1,659,971 shares of Common Stock
(vi)	Mr. Hall:
	(a)	As of the date hereof, Mr. Hall may be deemed the beneficial owner of 1,659,971 shares of Common Stock.
		Percentage: Approximately 5.2% as of the date hereof.
	(b)	1.  Sole power to vote or direct vote: 0
		2.  Shared power to vote or direct vote: 1,659,971 shares of Common Stock
		3.  Sole power to dispose or direct the disposition: 0
		4.  Shared power to dispose or direct the disposition: 1,659,971 shares of Common Stock
	(b) By virtue of investment management agreements with SPOT, CMAG, CREL and CROP, CGI has the power to vote or direct the voting, and to dispose or direct the disposition, of all of the 1,659,971 shares of Common Stock beneficially owned by SPOT, CMAG, CREL and CROP. By virtue of his direct and indirect control of CGI, Mr. Hall is deemed to have shared voting power and shared dispositive power with respect to all Common Stock as to which CGI has voting power or dispositive power.
	(c)        Information concerning transactions in the Common Stock effected by the Reporting Persons during the past sixty days is set forth in Appendix B hereto and is incorporated herein by reference.  Unless otherwise indicated, all of such transactions were effected in the open market.

CUSIP No. 64128B108 SCHEDULE 13D Page 12 of 19 Pages

(d)        No person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock reported herein.

(e)        Not applicable.

Item 6.

CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

The Reporting Persons are parties to an agreement with respect to the joint filing of this Schedule 13D and any amendments thereto. A copy of such agreement is attached as Exhibit 1 to this Schedule 13D and is incorporated by reference herein. Other than the joint filing agreement, there are no contracts, arrangements, understandings or relationships among the Reporting Persons or between the Reporting Persons and any other person with respect to securities of the Issuer.

Item 7.	MATERIAL TO BE FILED AS EXHIBITS
Exhibit	Description
1	Joint Filing Agreement, dated January 31, 2013
2	Letter to the Board, dated January 30, 2013

CUSIP No. 64128B108 SCHEDULE 13D Page 13 of 19 Pages

SIGNATURES

After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date: January 31, 2013

CLINTON SPOTLIGHT MASTER FUND, L.P.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON MAGNOLIA MASTER FUND, LTD.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name: Francis Ruchalski

Title:     Chief Financial Officer

CUSIP No. 64128B108 SCHEDULE 13D Page 14 of 19 Pages

CLINTON RETAIL OPPORTUNITY

PARTNERSHIP, L.P.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON GROUP, INC.

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

/s/ George E. Hall

George E. Hall

CUSIP No. 64128B108 SCHEDULE 13D Page 15 of 19 Pages

Appendix A

Directors and Executive Officers of Certain Reporting Persons

CLINTON GROUP, INC.

The following sets forth the name, position and principal occupation of each director and executive officer of CGI. Each such person is a citizen of the United States of America. The business address of each director and executive officer is 9 West 57th Street, 26th Floor, New York, New York 10019.

Name	Position and Principal Occupation
George E. Hall	Director, Chief Investment Officer and President
Francis A. Ruchalski	Director and Chief Financial Officer
John L. Hall	Director

CLINTON SPOTLIGHT MASTER FUND, L.P.

Clinton Spotlight GP, LLC, a Delaware limited liability company, is the general partner of SPOT. George Hall is the controlling person of Clinton Spotlight GP, LLC.

CLINTON MAGNOLIA MASTER FUND, LTD.

The following sets forth the name, principal occupation and business address of each director of CMAG. There are no executive officers of CMAG. Each such person is a citizen of the United Kingdom.

Name	Principal Occupation	Business Address
Jane Fleming	Client Accountant of Queensgate Bank & Trust Company Ltd.	c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
Dennis Hunter	Director of Queensgate Bank & Trust Company Ltd.	c/o Queensgate Bank & Trust Company Ltd., Harbour Place, 5th Floor, 103 South Church Street, P.O. Box 30464 SMB, Grand Cayman, Cayman Islands
Roger Hanson	Director of dms Management Ltd.	c/o dms Management Ltd., P.O. Box 31910 SMB, Ansbacher House, 20 Genesis Close, Grand Cayman, Cayman Islands

CUSIP No. 64128B108 SCHEDULE 13D Page 16 of 19 Pages

CLINTON RELATIONAL OPPORTUNITY MASTER FUND, L.P.

Clinton Relational Opportunity GP LLC, a Delaware limited liability company, is the general partner of CREL. George Hall is the controlling person of Clinton Relational Opportunity GP LLC.

CLINTON RETAIL OPPORTUNITY PARTNERSHIP, L.P.

Clinton GP, Inc., a Delaware corporation, is the general partner of CROP. George Hall is the controlling person of Clinton GP, Inc.

CUSIP No. 64128B108 SCHEDULE 13D Page 17 of 19 Pages

Appendix B

TRANSACTIONS IN THE ISSUER'S SHARES OF COMMON STOCK BY THE REPORTING

PERSONS DURING THE PAST SIXTY DAYS

This Appendix sets forth information with respect to each purchase and sale of Common Stock that was effectuated by a Reporting Person during the past sixty days. As of the date of this Schedule 13D, SPOT, CMAG, CREL and CROP are the only Reporting Persons that directly own Common Stock. Unless otherwise indicated, all transactions were effectuated in the open market through a broker.

SPOT

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
12/4/2012	8,640	2.3455
12/4/2012	2,000	2.3101
12/7/2012	(50,000)	2.35
12/11/2012	(50,000)	2.59
12/11/2012	3,800	2.595
12/12/2012	50,000	2.78
12/12/2012	95,380	2.84
12/12/2012	31,155	2.8125
12/13/2012	2,500	2.5777
12/13/2012	22,500	2.5581
12/14/2012	50,000	2.5587
12/17/2012	165,000	2.53
12/20/2012	1,800	4.5
12/21/2012	4,700	4.5
1/2/2013	2,500	2.98
1/2/2013	5,275	2.9565
1/3/2013	(30,000)	2.9922
1/4/2013	(9,000)	3.0615
1/4/2013	(600)	3.07
1/4/2013	(2,200)	3.07
1/8/2013	(3,600)	2.8006
1/8/2013	400	2.745
1/8/2013	(6,800)	2.8026
1/8/2013	6,800	2.7087
1/8/2013	15,453	2.7087
1/10/2013	(10,000)	2.9011
1/11/2013	(120)	3
1/11/2013	3,000	2.9998
1/11/2013	(2,880)	3.03
1/16/2013	(6,000)	3.1413
1/16/2013	(3,000)	3.1501
1/17/2013	2,500	3.032
1/17/2013	(2,500)	3.3095
1/17/2013	(2,500)	3.3095
1/17/2013	2,500	3.037

CUSIP No. 64128B108 SCHEDULE 13D Page 18 of 19 Pages

1/18/2013	(3,000)	3.17
1/24/2013	9,900	2.8889
1/24/2013	16,500	2.8277
1/24/2013	3,300	2.893
1/24/2013	3,300	2.8565
1/28/2013	20,000	2.6325
1/29/2013	1,650	2.6057
1/29/2013	14,850	2.6626
1/30/2013	54,450	2.7982

CMAG

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
12/7/2012	100,000	2.35
12/10/2012	49,800	2.4928
12/10/2012	200	2.45
12/11/2012	100,000	2.59
12/11/2012	1,900	2.595
12/14/2012	20,000	2.5587
12/17/2012	(272,100)	2.53
12/18/2012	200	2.669
12/24/2012	(200)	2.66
1/24/2013	9,900	2.8889
1/24/2013	16,500	2.8277
1/24/2013	3,300	2.893
1/24/2013	3,300	2.8565
1/28/2013	20,000	2.6325
1/29/2013	1,650	2.6057
1/29/2013	14,850	2.6626
1/30/2013	54,450	2.7982

CREL

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
1/8/2013	(6,800)	2.8026
1/8/2013	6,647	2.7087

CUSIP No. 64128B108 SCHEDULE 13D Page 19 of 19 Pages

1/10/2013	153	2.9067
1/24/2013	10,200	2.8889
1/24/2013	17,000	2.8277
1/24/2013	3,400	2.893
1/24/2013	3,400	2.8565
1/25/2013	26,800	2.7426
1/25/2013	14,000	2.7444
1/25/2013	18,000	2.7256
1/28/2013	10,000	2.6325
1/29/2013	1,700	2.6057
1/29/2013	15,300	2.6626
1/30/2013	56,100	2.7982

CROP

Trade Date	Shares Purchased (Sold)	Price Per Share ($)
12/4/2012	8,640	2.3455
12/4/2012	2,000	2.3101
12/7/2012	(50,000)	2.35
12/11/2012	(50,000)	2.59
12/11/2012	3,800	2.595
12/13/2012	2,500	2.5777
12/13/2012	22,500	2.5581
12/14/2012	30,000	2.5587
12/17/2012	107,100	2.53
12/20/2012	1,700	4.5
1/2/2013	2,500	2.98
1/2/2013	5,275	2.9565
1/3/2013	(20,000)	2.9922
1/4/2013	(6,000)	3.0615
1/4/2013	(2,200)	3.07
1/11/2013	(80)	3
1/11/2013	2,000	2.9998
1/11/2013	(1,920)	3.03
1/16/2013	(4,000)	3.1413
1/16/2013	(2,000)	3.1501
1/17/2013	2,500	3.032
1/17/2013	(2,500)	3.3095
1/17/2013	(2,500)	3.3095
1/17/2013	2,500	3.037
1/18/2013	(2,000)	3.17

EX-99

EXHIBIT 1

JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

DATE: January 31, 2013

CLINTON SPOTLIGHT MASTER FUND, L.P.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON MAGNOLIA MASTER FUND, LTD.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON RELATIONAL OPPORTUNITY

MASTER FUND, L.P.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON RETAIL OPPORTUNITY

PARTNERSHIP, L.P.

By: Clinton Group, Inc., its investment manager

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

CLINTON GROUP, INC.

/s/ Francis Ruchalski

Name:  Francis Ruchalski

Title:     Chief Financial Officer

/s/ George E. Hall

George E. Hall

EX-99

EXHIBIT 2

Clinton Group, Inc.

9 West 57^th Street, 26^th Floor

New York, New York 10019

January 30, 2013

Mr. James P. Hynes

Chairman

Neutral Tandem, Inc.

d/b/a Inteliquent

550 West Adams Street

Suite 900

Chicago, IL 60661

           RE:       Track Record of Value Destruction and the Way Forward

Dear Mr. Hynes:

I write on behalf of Clinton Group, Inc., the investment manager to several partnerships that collectively own more than 1.6 million shares of Neutral Tandem (the “Company”) stock, to express grave concern about the manner in which the Board and management team have conducted themselves and the tremendous destruction of shareholder value that has resulted.

Since the Company’s late 2007 IPO at $14 per share, shareholders have lost more than $250 million and the stock is down more than 80%. We think it is time for the incumbent board to step aside to allow shareholders to elect a new Board that is tasked with creating value for public shareholders – something the existing Board has abjectly failed to accomplish. We are convinced the Company is worth substantially more than the current stock price; as we describe below, we believe the Company is worth at least $4.75 per share. We are equally convinced that the current Board, and especially its long-serving members, is an impediment to achieving that valuation.

Neutral Tandem had every opportunity to be a blockbuster company. It was a pioneer in a “network effect” business, with a clear lead, a wide competitive moat and recurring revenue. The business was generating significant cash flow and had every hallmark of a terrific economic enterprise. But then, the Board and management team squandered a great thing.

As a Board, you have made a series of horrifically bad business decisions. Just a few reminders of the past will suffice to prove the point.

First, sitting on significant cash reserves and a good, free cash flowing business, you should have instituted a regular dividend. Instead, you spent $100 million buying a business half-way across the globe, outside the Company’s industry, operating with a different currency, tax regime, language, set of accounting rules, customer base and technology. Predictably, the acquisition has destroyed significant value. Not only is the operation worth substantially less than you paid for it, you have invested tens of millions in capital equipment and management has been distracted by a series of operational, sales, accounting and tax hiccups in Italy, while investors at home have suffered through quarter after quarter of missed expectations.

Second, you permitted the management team to violate your largest customer’s trust (and contract) by dumping tens of billions of minutes of unauthorized, inter-LATA calls onto their network while simultaneously over-charging the customer (by a factor of two) for other traffic. So much for your “Code of Business Conduct and Ethics” which provides that you will engage in “ethical business relationship[s] based on mutually beneficial long-term relationships … [with your] suppliers and other third parties.” Predictably, AT&T discovered both of these serious offenses, demanded redress and left the Company with about half its prior (and now suspect) EBITDA run-rate.

Third, in prosecuting patent litigation against Peerless Networks, the Board authorized an expensive and distracting endeavor that ultimately led to the invalidation of the Company’s patent. Worse, the relationship between the two companies has been forever tainted, even though there is solid industrial logic to putting the two businesses together. We understand that the emotional scars of the litigation have stood in the way of such a transaction to this day, which has prevented shareholders from realizing value.

Fourth, as you well know, nearly every new service and attempt to diversify away from the original business has been fraught with false starts, miscalculations and bad implementation. The Company made a “$1 million mistake” in launching the so-called “all-in-one” service because your supplier arrangement with Comcast was “misunderstood” and never reduced to writing. Growth in the DID termination product was severely hampered because the Company was unable to provide necessary reports to its partners to validate the use of the product. And, after much fanfare and millions in capital investment, the hosted services offering with Cisco was pronounced yet another failure and shuttered within a year of its launch.

These misjudgments by the Board are just a few examples of the many ways in which the long-standing directors have failed shareholders. Others include failing to interview even a single outside candidate for the Chief Executive Officer’s job upon Mr. Wren’s resignation; leaving in place the prior Chief Financial Officer for far too long while he failed to properly model the business, implement appropriate controls and reporting, hedge currency risk, control costs, guide investors or understand capital allocation; accelerating the vesting of stock for the prior Chief Executive Officer to permit him the rewards of service while not having to serve; investing the Company’s cash in auction-rate securities; refusing to adopt what appear to be legitimate and legal ways to reduce the Company’s tax burden; adopting governance policies from a different decade, such as super-majority voting requirements; filing critical information with the SEC in the dark of night (e.g. on New Year’s Eve in 2009 and the Friday before President’s Day Weekend in 2011); refusing to investigate or enforce the corporate opportunity doctrine by allowing a former Board member to seemingly take a Company investment opportunity for himself; configuring the Ethernet business as a direct-to-enterprise sale, for which the Company had no experience or ready sales force; announcing a dividend recapitalization that then had to be modified and substantially curtailed before implementation, just two months later; and running a “strategic alternatives” process without the help of the most relevant, able and experienced officers and directors of the Company because of supposed “conflicts of interest” that appear to us, at best, exaggerated.

Given the track record of bad decision making and the resultant stock price performance, you should own up to your mistakes and make way for a new Board.

That is especially important now, as the Company is at a critical juncture. Indeed, in spite of your inability to execute and oversee well the strategy and operations of the business, we believe the Company has opportunities to create value for shareholders, can generate significant cash flow going forward and regain its footing for future growth. None of these things is likely to happen however if the same kind of decision making that has plagued the Company since its IPO pervades its future.

An independent, thoughtful Board would immediately reverse the Company’s ill-conceived foray into the IP backbone business by selling Tinet to a facilities-based carrier capable of generating margin from the existing traffic. With revenue of approximately $60 million in 2012, we estimate that such a sale could garner as much as $30 million for the Company and substantially reduce (by perhaps as much as $15 million) the capital expenditures required to continue to operate Tinet at breakeven in 2013 and beyond.

The tandem business and its related services has and will continue to experience some volatility as AT&T Mobile and carriers desiring to land traffic onto the AT&T Mobile network contemplate the Company’s past conduct and new rates. Our modeling and industry contacts suggest that the Company can still achieve $30 million in EBITDA in 2013 (and more in 2014) if it undertakes appropriate cost cutting, network grooming, customer retention efforts and, importantly, fair business practices. We like our chances on these points much better with a new Board.

Such a new Board would be greeted, we believe, with a new stock valuation as well. With an estimated $20 million in cash at year-end and a sale of the Tinet business for $30 million, the current stock price implies an enterprise value for the tandem business of just $35 million. With $30 million in estimated 2013 EBITDA and capex requirements of just $10-15 million, this implied multiple of EBITDA and cash flow are exceedingly low.

We believe a new Board would give shareholders the confidence to buy the stock at a much higher multiple – one that accounts for the real possibility that such a change in leadership would dramatically increase the likelihood of the business stabilizing and even growing. With just a 3.5x forward EBITDA multiple (and a sale of the Tinet business for $30 million), the stock should rally to more than 80% higher than its current price. Once the tandem business is stabilized, an objective Board would then likely consider a sale of the Company at a premium, given the challenges of operating a public company at this small scale.

None of this – the sale of Tinet, the stabilizing of the domestic business or the ultimate sale of the Company – is being priced into the stock today for the simple reason that shareholders have lost confidence in the willingness and ability of the long-serving board members to effectively oversee the Company. Please do us all a favor and replace yourselves with professionals in whom the shareholders can have confidence.

If you choose not to do so, we will nominate new directors to serve in your stead at this year’s annual shareholders’ meeting. We know of no shareholders who are enthused about your leadership and tenure and can imagine none who would prefer, if given a choice, more of the same.

Best regards.

Gregory P. Taxin

Managing Director

cc: Board of Directors, Neutral Tandem, Inc.