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

Wall Street

from the look-ma,-no-registration dept

Tue, Nov 14th 2006 6:14pm — Mike Masnick

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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9 Comments

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Mark, 14 Nov 2006 @ 6:42pm

Wow
So, what happens when their lock period expires? I remember our execs and major holders dumping at first chance at a startup I worked at in SF (Omnisky).

That day will be fun.
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Xenohacker@hotmail.com, 14 Nov 2006 @ 6:52pm

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... :-)
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Mark, 14 Nov 2006 @ 7:32pm

Vonage Song
Hey now, that song is catchy :) You remember it, don't you?

Song: Woo Hoo - 5678s
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Anonymous Coward, 14 Nov 2006 @ 8:19pm

Good news for me
Go on, make Vonage sound like a dog. I sold short long ago, just wish I hadn't been so timid and had bet the farm. =)

Still, making enough to make me happy.
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Rico J. Halo, 14 Nov 2006 @ 8:43pm

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.

~RJH

http://www.thatpoliticalblog.com
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The Swiss Cheese Monster, 15 Nov 2006 @ 12:03am

It will be a sad sad day in our house when Vonage dies.

I love the service - love that I'm not with AT&T or some other major brand.

This sucks.

I wonder what is so wrong with Vonage that is preventing them from growing like they ought?

Is it the service? Or is the company poorly managed?
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Mike, 15 Nov 2006 @ 5:38am

Price
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ohreally, 15 Nov 2006 @ 8:12am

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?
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Jacob Williams, 24 Jul 2007 @ 10:12am

ASSISTANCE
From Jacob Williams
COTE D'IVOIRE
ABIDJAN

Dear
I,Jacob Williams and my Sister . we are orphans being that we lost our father and mother. our late father was a serving director of the Cocoa exporting board until his death. He was assassinated by the rebels following the political uprising. Before his death he has deposited in a bank here in Côte d´Ivoire,the sum of $9 million which was meant for the importation of cocoa processing machine. But he informed the bank that the money belong to his oversea associate who is the beneficiary.

I want you to do us a favour to receive this funds to a safe account in your country or any safer place as the beneficiary. I have plans to do investment in your country, like real estate and industrial products. This is my reason for writing to you. Please if you are willing to assist me and my only sister, indicate your interest in replying soonest. We are willing to offer
you 15% percent of the total sum as your compensation for receiving the money to your country
Thanks and best regards .
Jacob Williams
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