It seems pretty well accepted at this point that Vonage's IPO was one of the more bungled IPOs in a while. Hyped to a tremendous level, the institutional investors never showed up, and the company resorted to convincing its own customers it was a good investment -- a strategy that backfired when those less sophisticated investors got stuck with stock they didn't want. On top of that, the company's financial position doesn't look promising, just as there's increasing competition. The last thing that the company needs right now is for a bunch of internal shareholders who own a tremendous amount of equity in the company to have their lockup period end, flooding the market with more shares and driving down the price. So, with that in mind, it appears that the biggest shareholders, including founder Jeffrey Cintron, have agreed to change a shareholder rights provision that not only effectively extends the lockup period, but means they don't even have to register their shares with the SEC (meaning they will not be able to sell their shares). It's certainly one way of suggesting these shareholders believe in the company -- putting in place additional handcuffs on themselves to keep them from selling. However, it also has the feel of desperation. If they really believed in the company, they just wouldn't sell. Changing the rules to make it even more difficult for them to sell makes it sound like they're really tempted to sell, but know they shouldn't.
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