The head of the foam should be at the top of the collection cup neck where the collection cup inserts into the body of the skimmer and it should not be flowing over the sides of the skimmer body when you take the collection cup off. You will not immediately get steady skim mate collecting in the cup but it will collect as the skimmer skims the waste out of your tank be patient and you will see it collecting. If it doesn't then close the gate valve a little bit at a time until you get the results you are looking for.
Also, how high is the water level inside the skimmer body? Our recommended water level is 6.5" - 7"
You can also try priming your skimmer again.
To prime the skimmer do the following:
1. Turn off skimmer
2. Remove air silencer
3. With your thumb, plug the air hose so no air gets pulled into the skimmer
4. Turn on the skimmer
5. Let the skimmer fill up and run for a few minutes while keeping an eye on the inside and outflow of the skimmer. There should not be any air bubbles coming in/out of the skimmer. If you do, there may be an air leak and you need to tighten up the joints (manually, never use tools)
6. Once there is only water going in and out of the skimmer and it does not overflow (as it should not), then you can release the air hose and let air back into the skimmer.
7. Install the air silencer back and make sure you mount it up above water level.
Let me know if you have any other questions and I will be more than happy to assist you.