Now, Vonage Says Customers Still Have To Pay Up For Shares
from the not-so-fast dept
With its stock price tanking following its IPO, the news that made the rounds yesterday that Vonage indemnified its underwriters and would cover the cost of shares allocated to customers who now don't want to pay up led to speculation that they'd be let off the hook. However, Vonage has moved to make it clear that isn't the case, and that it expects everyone who was allocated shares to pay up. This is certain to cause them a few problems, both from customers who want to get out of their obligation because of the falling stock price, as well as those alleging problems in the allocation of shares and ended up with shares when they thought they were receiving none. Vonage's IPO has been a financial mess, but the real fallout will be in the lingering damage it does, both to the company's balance sheet and to its reputation with customers.
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first
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Refreshing, a "first" post worth reading!
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Say do what
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Honestly
Cheap as Vonage?, I have seen and used cheaper. MOST competitors to Vonage (at least in Canada) offer unlimited plans $10 cheaper per month then Vonage, and offer better features.
Vonage is just over-hype, period. Its the buzz word that sticks in your head because too many websites like this rave about Vonage this and Vonage that. I bought into this and switch to them expecting cheaper and better service, and I didn't get it. Do yourself a favour and look around, and you will find a dozen competitors to Vonage that do VOIP right.
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Effect on customers
But what has happened is that after the IPO, the share price started falling. Vonage is now telling all those people who bidded on that range to pay up, even though they are basically paying more to Vonage for the stock than it's worth on the market.
Naturally, those people are upset about having to do that, but regardless of the system used, that's the nature of an IPO. Sometimes really good, sometimes really bad.
In my opinion, your average Vonage customer shouldn't feel the effects for now. The negative fallout from the situation will almost definitely make lots of the people involved dislike Vonage. It could lead to larger financial problems, which could, in turn, then effect the service (bankruptcy, raised prices, etc.).
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Vonage Works for me
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Re: Vonage Works for me
Seems like buying a car cheaper, but with no airbags.
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The demise of Vonage
Their customer service is FANTASTIC when you're a new customer setting up your service, after they've been billing you for a few months you can forget about ever getting any support at all, and don't even bother asking for a credit from them when your service goes down for a few days and it takes five or six hours on the phone to get the message across to them (cell phone minutes, of course, becasue your phone is dead).
Bottom line - this company is jacked up top to bottom and doesn't offer a significant enough value proposition to survive. This latest is another example of the character or culture of the company - one day the CEO is on TV and says one thing (which is against SEC regulation, by the way), and then the company reneges days later.
Someone will buy them for their customer base when they finally die. My money is on AT&T.
BTW - I recently quit Boneage and got $40 / month flat, long distance included, with all the bells and whisltes including online voicemail checking, email notification, etc. from the new AT&T/SBC Company. It's a few bucks a month more, but I can always get them on the phone within minutes, the service works well every single time, and I've got real 911 service that actually works.
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Re: Capitalism
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I've never had a problem with their customer service. Actually, they have been quite brilliant.
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I agree with Veteran User
As for the people who do not want to pay for the stock they AGREED to buy, anyone who is stupid enough to agree to buy stock before it even hits the market gets what they deserve. Most IPO's tank in the first weeks and Vonage is no exception. Just read up on the company and you will see that they have yet to ever turn a profit.
Of course if we all quit Boneage and signed up for AT&T for $40 a month flat, well here comes the monopoly again and I guarantee that the $40 a month flat will soon start increasing.
Last thing, program a speed dial number in your phone for your local police department and when you get the recording press "0" and you will be transferred to the attendant. It might take 5-10 seconds more that dialing 911, but for $180 per year savings over the $40 flat AT&T, I will live or die with it.
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I did it...
When I heard about the IPO I wanted in, though I was almost scared off by reading through the prospectus in which Vonage made it very clear that committing to purchase shares was risky. I had to have been forced to read and check off boxes acknowledging I had read in their material (at least three times!) that they were not profitable and were not planning on being profitable anytime in the near future.
Sure the share's are down $5.36 from where they started and people are saying they do not want to pay...but let's say tomorrow they gain that $5.36 back and then some. Those customers who have not paid yet for the stock allocated to them are going to be quick to want to pay up at $17 (even if its value was $20) because they feel "entitled" to that...so why are they not "entitled" to pay for the loss too??
The stock market is a risk and those that bought without doing their homework need to realize this is not some game or a "sure thing."
I am in this for the long haul!
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deadbeat bidders must pay
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Very true on the stock issue
Current status - that's life for the experienced speculators that jumped in, becasue we all know crazier things have happened with tech IPO's then what so-called analysts expected.
But to the unitiated investor/customer that jumped on Vonage's BS Spam to drive and get more people to buy into the IPO, I feel very sorry. Of course their stuck paying for what they comitted to, and I guess it's caveat emptor, but I still feel bad that they were duped by a company that you'd hope you could trust.
Here was my logic - the big IPO's of recent years, i.e. Google, were multiple times overcommitted. In other words, they had many times more investors lined up and committed to buy shares than they ever could have sold to. There was no chance in a million years of the "average joe investor" getting in on that action. But Vonage is voicemail and email spamming customers with a "special offer" to get in on the IPO? WTF? Doesn't it tell you something is wrong when the educated investors with money aren't interested, at least not at the price you're offering?
It never should have happened. Desperate ploy to keep a poor company alive, unfortunately. Hopefully thing will remain competitive out there and someone will have a quality offering at a competitive price, but these guys are sunk, no question, unless someone with extremely deep pockets bails them out. It's not a matter of if, it's a matter of when.
Watch them p**s away all of their IPO money on ads, then fail to deliver to all of their new customers. They don't have the infrastructure to support the customers they have now, they'll be even worse off if a bigger ad campaign succeeds!
This one's going down in the history books, for sure. Somebody buy the rights to the book now - the rise and fall of Vonage. It will be a good story, for sure.
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clarification...I did it...
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shut up, pay up, and make an INTELLIGENT decision next time.
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Bonerage
the unwashed masses sell off at pennies on the dollar
then the cry will be somebody scammed the thing to work out like that. Leave the prospecting to the old hands with the money to burn. People forget that the only people to get rich in the gold-rushes were the store owners, whorehouse madams,preachers, and the tax collectors, all the miners starved at wages
or flat gave up.
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As for where to go for cheap phone, I think Verizon VoiceWing lowered their price to a couple of pennies below what Vonage offers.
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vonage
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vonage
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Re: VONAE
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Re: The demise of Vonage
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Re: Vonage Works for me
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