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Vonage Errors Could Complicate
Vonage Efforts to Collect on IPO
By SHAWN YOUNG
June
Errors Could Complicate
Vonage Efforts to Collect on IPO
By SHAWN YOUNG
June 2, 2006 1:30 a.m.
Vonage Holdings Corp. said in a Securities and Exchange Commission filing that technical errors in its program to make shares in its initial public offering available to customers could give some of those who bought shares through the program grounds to seek damages, or require the company to buy back their shares at the IPO price.
Vonage, which provides Internet-based phone service, set aside 4.2 million shares for some of its customers to buy at the IPO price of $17. About 9,000 to 10,000 customers participated in the highly unusual offer, called a directed-share program. Some companies set aside small batches of stock in such programs for "friends and family," but offers that extend to consumers are very rare, experts said. When Vonage's stock plunged as soon as it started trading, some participants in the program said they want to cancel their purchases. On Thursday, Vonage shares fell 39 cents in 4 p.m. New York Stock Exchange Composite trading to $11.63.
Vonage, based in Holmdel, N.J., had informed customers about the IPO program in voicemails, emails and letters. In a filing made before the IPO, Vonage identified errors in the way customers were notified that "could be determined to be an illegal offer in violation of Section 5 of the Securities Act, in which case recipients could seek to recover damages or seek to require us to repurchase their shares at the IPO price."
Vonage said its first email to customers and the first Web page it directed customers to for more information didn't contain an active link to the prospectus. In addition, the company said a voice message it sent to customers provided a website address with a link to the prospectus but did not provide the name and address of a person who could provide potential investors with a prospectus. Providing the Web site address could be viewed as exceeding the information the company is allowed to provide, the filing said, while failure to include the name and address of a person could mean the voicemail would be grounds for buyers to seek redress, the filing said.
REMAINDER AT:
http://online.wsj.com/article/SB114922391790669648.html
Read The Full Thread: Vonage customers may have recourse from IPO-WSJ
• NEW YORK, June 2 (Reuters) - Some customers of Internet telephone service provider
• Whenever you have a financial disaster you'll have a legal fight, whether or not
manse posted "Errors Could Complicate
Vonage Efforts to Collect on IPO
By SHAWN YOUNG
June" on 06/02/2006 |
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