Vonage IPO Plans Rumored

from the questions-to-ask... dept

Back in May, when Vonage raised $200 million many wondered why they didn't go for an IPO, while others assumed that the huge cash influx was to push them towards an IPO. There was just one problem: it's widely believed (but never officially confirmed) that Vonage CEO Jeffrey Citron is banned from running a public company as part of his settlement with the SEC for misusing Nasdaq's SOES in the 90s. In fact, that's why many figured Vonage wouldn't IPO. The company even played down the idea of going public, by noting that it would be a distraction -- which is probably true, but probably wasn't the core reason. Still, as we noted at the time, there's too much money on the table for this to be an issue for too long. It seemed likely that someone would figure out some way to get around the ban, even if it eventually meant Citron would have to step aside in some manner. Well, we might find out just what the solution is, as reports are spreading that Vonage is about to file for a $600 million IPO. Considering that they just raised $200 million a few months ago, that might seem like a lot -- but given the competitive environment they're in, perhaps it's not so crazy. Well, not so crazy that they'd need the money. The fact that they need so much to stay competitive, however, may point to larger problems with the business model. Either way, there's a decent chance that someone may try to step in and buy them out before any IPO, which could solve the whole Citron situation in one simple move.
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  • identicon
    Pete Austin, 25 Aug 2005 @ 2:20am

    They are being prudent

    "The old saying is that bankers will give you the money when you don't need it [but when] you really want something, you don't get it."
    Business plan workshop. When the world is lining up to throw money at you, catch it first, then worry about how to spend it.

    reply to this | link to this | view in chronology ]

    • identicon
      Mark Walsh, 25 Aug 2005 @ 7:24am

      Re: They are being prudent

      Where does it say in the SEC settlement that Citron is barred from running a public company? He's only enjoined from associating with a broker or dealer as far as I can see.

      reply to this | link to this | view in chronology ]


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