Major Vonage Share Holders Force Themselves To Hold Shares In Last Ditch Effort To Keep Investors Happy

from the look-ma,-no-registration dept

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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Comments on “Major Vonage Share Holders Force Themselves To Hold Shares In Last Ditch Effort To Keep Investors Happy”

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9 Comments says:

Ahead Of The Times...

Let me tell you how Vonage could become and AT&T sized monopoly. They need a company owned internet service provider. If they could provide this and somehow keep the same pricing they would very quickly take over. Could you imagine their little sales people calling you… “Yes sir we offer all the features a home phone could offer along with free long distance for a bill in the twenty dollar range…” Because at the current time you are required to have a pre-existing ISP to use their service along with a bill in the twenty dollar range. I think it is an idea ahead of its time without a company owned I.S.P. Oh and get rid of the stupid song on that commercial… 🙂

Rico J. Halo (user link) says:

Think Sprint ION

I was one of the very first VoIP customers years and years ago when Sprint tried their ION program. ION stood for integrated on demand network which was basically VoIP and DSL. The plan included 2 VoIP phones and a gob (at that time) of dsl bandwidth for the phones and net browsing. Unfortunately the hardware and bandwidth all came form the local telcos who always put them at the botttom of the priority list. My service was down more than up. Not only did they not charge me once during the 9 months I had ION but they paid me $450 to find a new phone service provider and ISP when they shut the program down. VoIP is the wave of the future. Right now its just still up in the air who will do it right. I expect it to be Ma Bell again.


ohreally says:

Vonage was toast long before their IPO, they were trying to sell it, couldn’t, then went public. Why should anyone buy them when they can offer VoIP themselves? Cable is currently kicking the telco’s butt in stealing voice customers away, what chance does a start up pure play, unable to bundle services, have in that fight?

Vonage isn’t being made to look like a dog, it is a dog. The pipe owners are not going away, its going to be between the regular guys (AT&T, Verizon) and the cable companies, because they own the infrastructure. Companies that think they can take those deep pockets on directly, selling the same services, thats just nuts. How can you sell a product where a competitor owns your delivery system? How can you guarentee a service where you have zero control over QoS?

Jacob Williams (user link) says:


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