Vonage Files For IPO, Has To Ditch CEO
from the no-real-surprise dept
VoIP provider Vonage has filed for an IPO, answering long-running speculation over the company’s future. The company says it wants to raise $250 million, this coming after raising $450 million in private money last year alone. One juicy tidbit of the filing is that the company’s moved founder and CEO Jeffrey Citron to the position of chief strategist — citing his settlement with the SEC and NASD over a scam when he worked for online trader Datek “which resulted in extensive fines, bans from future association with securities brokers or dealers and enjoinments against future violations of certain U.S. securities laws”. It had been widely believed that Citron was under some sort of restriction like this, though never confirmed by himself or Vonage. The company’s filing also says that Citron’s previous behavior and subsequent settlement has cost it previous business relationships, and is a risk because of some companies’ unwillingness to or policies that prevent them from doing business with people under settlements for securities transgressions. Apart from finally shedding some light on Citron’s issues, the prospectus also gave some details on Vonage’s business, saying it spends over $213 in marketing on each new subscriber, while it costs the company an average of about $8 per month to serve a subscriber.