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.


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Comments on “Vonage Files For IPO, Has To Ditch CEO”

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28 Comments
BigDaddyDave says:

Re: Simple Math

Good services bad customer service. Recently it seems Vonage went to offshoring for their customer/technical support. So now when I call about a simple billing questions I have to explain my problem ten times to three different people before someone understands me. Then there’s no guarantee that I’ll understand the answer. No more for me thank you. I’ll go back to AT&T VoIP. At least I can understand them when I call.

bjc (profile) says:

Re: Re: Same company?

Are you dealing with the same Vonage I am?!? Every time I have called them, not only was I served by a well-trained native english speaker, but I was served quickly and skillfully.

Vonage customer service reps are the first I have ever seen (in any industry) who would actually ‘take ownership’ of their support issues. For example, something I was doing was going to take a couple of weeks to be ready. The rep I spoke to actually added that date to his calendar and offered to personally handle it when the time came. This is exceptional service and a good example for others.

Another CSR knew something I was asking for would cause a billing issue within their system. They actually took the time to make sure and credit my account for the extra charge before provisioning the service I was asking for. Try that with the normal phone company! In my experience, all of Bells ‘extra charge traps’ were always bill now, complain later.
I am exceptionally happy with Vonage.

anony says:

Re: simple math?

If the marketing is done properly, you consider it an investment, not a loss. Vonage certainly has their name out in the open. Just take a look at how many Vonage commercials you see compared to Packet 8 commercials. If I were to sign up with VoIP service right now, I would certainly choose Vonage, because…..they’re the only ones I ever hear about.

JerseyRich says:

Re: Re: I think they'll do fine

Right now, Vonage (and VoIP overall) is still pretty new. Once more people know what it is, does, and how it works that $213 will fall rapidly.
Sure AT&T and others may have name recognition but they are also a slave to their outrageous prices. They will still charge more for the same service that Vonage provides.
I used to have unlimited everything with Verizon for $55 a month. When I told them I was switching they offered to lower the price to $40. That was STILL $15 more than Vonage!
So, I’ll be a Vonage customer for a long time to come.

Tom says:

Re: Re: simple math?

1 year 17 days until they will show a profit for a customer. Then it will progress to about 203 dollars a year profit.
This seems like a very reasonable, AKA win win, prospect. Enlighten me if I am missing something please.
This seems way to fair to the consumer and I suspect Telcos are scrambling to get the feds to screw this thing up.
I am very new to VOIP so I am very interested in other’s opinion and feedback.

Eli says:

are you nuts?

You guys need to do a little research on Vonage. If nothing else google “Jeffrey Citron SEC fraud” and see what comes back – a bevy of articles on the ills of the company. I had Vonage and would never ever go back to Vonage. When a company has as many individual blogs about staying away from this company as this one does, when the company itself buys the domain name vonagesucks.com – these are all gigantic clues to stay away. Invest your money in something else.

Carl says:

Re: are you nuts?

I am an ISP and wanted to partner with Vonage a few years ago when they were a startup. But that never happened. Today we are seeing the end result. Now because of their very active advertising, if anythig goes wrong with them, I think all VOIP providers will branded the same and the ILECs and CLECs win.

Vonage and Packet 8 says:

From a customer

The numbers look interesting. Roughly 1 year payback per customer, then $17/mo profit. I have been a vonage customer, customer service was horrible, but NO WORSE than Verizon. I am now a packet 8 customer. A lot of things simply don’t work at Packet 8. I believe at their current build rate, Vonage will have about 2 million customers by year end. @ 200 profit per user, that’s $400 million of margin. I believe they quickly will become an acquisition target, they are the best in the voip field. The cable company offers worse features, worse reputation for service at 170% of the cost. Ve

karen court says:

Re: Vonage is a fraud

yes i totally agree. i have called them since day one. with calls i was not recieving.calls that echo.all the time. couldnt hear people who were trying to call me or if i called them. they couldnt hear me. i tryed to work this out with them several times . i called to disconnect she told me there would be a disconnection fee of 49.00. for service i did not get, they had just gave me a free month a week prior for all mty trouble. then she said because i wanted to be disconnected. i had had enough. she said they were going to charge my card 96.00 she doubled it. im calling better business bureau i suggest to everyone they are taking you for a ride their service is terrible and not ok

D. Scheffler (user link) says:

SCAM FRAUD AND THIEFS

I can not express how frustrated I am at the incompetence of VONAGE. I ordered the service for my company in April, only to find out that the number that I had from BELL SOUTH was NOT able to be forwarded after already being promised it would be no problem. I was told that VONAGE was still working on it by May 1st. I had already moved in my new location and Bell South installed a new phone line for me, etc. I had called VONAGE at least half a dozen times as well as over seven (7) e-mails and corresponding letters only to be told to hold on the phone for 28 minutes as well as trying to charge me every month for a service that I NEVER received. I get these welcoming letters from Mr. Jeffrey Citron and I can’t even reply. I have been charged on my account for almost two (2) months now and still can’t speak to a real person that is either in our country or understands the FACTS. I have informed my bank, I have informed CSR’s and no one is comprehending (even after stopping my credit card). HELP!!!!!! THIS IS NOT A COMPANY THIS IS A SPAM SCAM. I WILL GO TO COURT, BECAUSE IT WOULD BE WORTH IT TO ME. HOW MANY TIMES DOES ONE HAVE TO CANCEL SERVICE FOR SOMETHING THEY NEVER REC’D OTHER THAN A PIECE OF EQUIPMENT THAT WAS NEVER SET-UP NOR USED. TO THIS DAY I HAVE NEVER HEARD BACK FROM THEM. THEY ARE STILL TRYING TO BILL ME.

Magic848 says:

2 ways to get help/credits

Vonage is not for everybody (although one must do some diligent homework to possibly determine this first), and for those that have been “injured” and not found fairness through normal channels:

1) Vonage’s “Emergency Response Team” with

person that called me back: 888-580-4020 ext 31628 Sultan

GOTO: http://complaint.bbb.org/ and file a complaint with the Better Business Breau of New Jersey, 1700 Whitehorse Hamilton Square, Ste. D-5, Trenton,NJ – 08690-3596.

The comapany is at: Vonage, 23 Main Street, Holmdel, NJ 07733

I hope Vonage is bought out by a company that can manage better, and is more forthcoming. The technology does have merit. But, I did not do my homework (should I have been expected to? I mean they do advertise “It’s so easy”), and my experience is the worst I have ever had.

Happy Hunting

PS: How are they doing?

Check out their BBB member page: http://www.trenton.bbb.org/nis/newsearch2.asp?ID=1&ComID=0221000011005249

John Tought (user link) says:

Vonage Files For IPO, Has To Ditch CEO

Citron moved out of CEO spot. Vonage has decided to file for an IPO, and is hoping to raise $250 million in the process. According to Marketwatch, Vonage CEO Jeff Citron has been moved to the position of chief strategist “so that he can dedicate his time to focusing on moving.
———–
John
http://clearcell.org

Dave says:

Vonage sucks

I have Vonage. I am so frustrated. I takes hours to get through to a customer service rep. When I do get throught to them, I have hard time understanding what they are saying. I saveral time they put me on hold and hung up on me. I think Vonage has the worse customer service. I think congress and BBB should look into this problem. When you ask for the customer representative name, they always give me bogus name. Next time when you get through to a Vonage customer service rep, the guy sound like the guy earlier when he said his name is Mike. This time he says his name is Ryan. This is crazy!! Vonage sucks!!

Ryan says:

Vonage [and its customers] have definitely suffered growing pains over the last 6+ months. If you look back about a year, the comments were incredibly positive compared to now..

I do believe however, that Vonage has not lost its vision. They want to provide a revolutionary service and excellent customer service but the market has become more difficult/competitive than expected.

All things considered, they are still a small and agile company compared to the telcos [Verizon?] and have the right vision to adapt to the market.

– Kukk

Jake says:

Vonage Sucks

The Technology is just not there yet. Vonage is a terrible service: echoes, dropped calls, beeping, lost sound packets- I dumped Vonage because I had to as did many of my friends. An IPO might raise money for Vonage but will it fix the underlying issue? I also heard that CTV denied Vonage a TV commercial spot because Vonage didnt have the coin.

Vonage is ahead of its time

Otto Summerfield says:

Vonage is a fraud

There;s no doubt in my mind that Vonage is a fraud. When I tried to hook up equipment they sent me, it blew out my network and blew out 2 computers. I didn’t have phone service for over two weeks. I finally got Verizon back with my cell phone, but 3 months later I was still be billed, and then they added that they wouldn’t take the equipment back because I had it more than 30 days. After they said they would cancel it a second time, I got the bill again.
I had Citibank change the card number.

Vonage is a rip, no doubt.

vonage victim (user link) says:

Vonage is a rip off

I’m building the above web site now for any complaints. When I called to cancel service (friday)(no further need), I was told the ‘system’ was down and they were unable. I then sent email on the next two days (a weekend), and called back on Monday to confirm cancellation, as it was the first day of a new billing period (in advance). They denied any contact and billed for the next month as they cancelled, plus 39.95 + tax on the cancel fee. Both times I called I was on hold for 1 hour, and then 45 mins to get to “account management”. Deplorable business practices.

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