Vonage to buy back shares for those not willing to pay.

Posts: 243 · Vonage Forum Master Joined: Jan 18, 2004 Posts: 243

My point is being proven right now! Mad

look at the price. I kind feel locked into this stock because I want to wait an see what happens yet I'm afraid that if I sell and they end up doing something will I be able to get my money back after the sale?

I really need Vonage to make an announcement as to what their intentions are so that I can figure out what I should do with this stock.

Posts: 4 · New Forum Member Joined: May 22, 2006 Posts: 4

You mean if Vonage does pay back those who bought? Don't see why selling should preclude you from getting payment back if they rescind. There'll be records of you owning the stock in a given period.

Posts: 13 · Vonage Forum Associate Joined: Oct 18, 2005 Posts: 13

Vonage was selling approximately 30 million shares, of which up to 13.5% (or about 4 million shares) was reserved for the Directed Share Program. And another 1.5% (about 400,000 shares) may have been bought by insiders (i.e. Tom Ridge's 2,500 shares that he purchased for $17 each).

4 million X $17 is $68 million (which would be the most that Vonage stands to lose, not counting any potential legal action), but it is money Vonage didn't have at all before the public offering. And the wording is clearly in the prospectus that VG wouldn't leave the underwriters holding the bag if their customers welched on their agreement to purchase shares.

I would assume that VG should get paid for about 29 million shares (assuming that 25% of people welch which I think will be higher than actual) and raise about 29M X $17 = $493 Million. If the stock offering had been priced at $16, VG would have brought in about 30M X $16 = $480 Million. So I'd say Vonage is not going to come out too badly unless there is additional fallout (i.e. lawsuits). Their stock price dropping shouldn't affect the company if they have the much-needed capital to work with.

And these welchers were given at most 50% of the amount they requested (if they made a confirmed bid for 200 shares and "lost" in the lottery -- i.e. they got 100 shares).

Posts: 2 · New Forum Member Joined: May 20, 2006 Posts: 2

rudedog40 wrote:

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BD869CB0C%2D6114%2D42E0%2DAD71%2D87FD4AC9B5BE%7D&siteid=yhoo&dateid=38868%2E6268832176%2D876017704

On Wednesday reiterated language in its initial public offering prospectus about paying back underwriters for any unsold IPO shares ordered by its customers. The company said it has "agreed to indemnify the underwriters against certain liabilities, including those that may be caused by the failure of Directed Share Program participants to pay for and accept delivery of the common stock which had been allocated to them."

So Vonage will back the underwriters for the losers who decided they were just 'pretending' to buy Vonage stock at the pre-IPO price. I have a relative who works for the Texas Attorney General's office. He's spoken to several of his superiors on this topic. All of them agreed that if Vonage were to come to them to assist in prosecuting any individual who refused to honor their committment to purchase their allocated shares, they'd take the case in a heartbeat. Vonage may be letting the underwriters off the hook, but that doesn't mean they won't sue you welcher's who think you got ripped off because they priced the stock too high. That's not how the game is played. So keep stopping the payment on those checks. That alone is a felony offense. It's called a 'hot check'. The AG office can prosecute you for that, regardless if Vonage lets you off the hook. By the way. As soon as Vonage made this announcement, the stock tanked even more. As of 2:45 CST, it's down another 3% to $12.12. Looks like the real investors are totally PO'ed and are dumping their stock to show their disapproval of Vonage's wimpy attitude in handling this situation.

For those that couldnt sell when they wanted, had shares stuffed into their DSP account after being told they had none and anyone else involved in this fiasco...How about not sending a check in the first place ...let them come after you. Sounds like a civil matter now. F the investment bankers they dont care about you and neither does Citron.

Posts: 5 · New Forum Member Joined: May 23, 2006 Posts: 5

i just got this email from Vonage

We would like to clarify certain aspects of our Customer Directed Share Program (Customer DSP). Pursuant to the terms and conditions of our Customer DSP, we agreed to sell to you, through our underwriters, and you agreed to purchase, the number of allocated shares set forth in your Customer DSP account at www.vonageipo.com.

To be clear, we have not offered and are not offering to repurchase any of our shares of common stock from our customers.

For further information on our Customer DSP, including our obligations to our underwriters to cover certain of their losses, please see our prospectus, which can be found by clicking here or by visiting
http://www.sec.gov/Archives/edgar/data/1272830/000104746906007592/a2170744z424b4.htm.

Sincerely,

Vonage Investor Relations

Posts: 2252 · Posted: Wed May 31, 2006 7:41 pm Post subject:

In light of Vonage having published an official email which dis-claims the topic title in this thread, I believe it is best to continue this conversation here: Considering not paying for your shares - read this first