Tomorrow will not be a good news day for VG

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

Judging by the media requests for interviews today and the questions they were asking... it is not going to be a good day tomorrow for Vonage.

Posts: 80 · Vonage Forum Senior Joined: May 24, 2006 Posts: 80

gfoulks wrote:

Judging by the media requests for interviews today and the questions they were asking... it is not going to be a good day tomorrow for Vonage.

Care to elaborate?

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

I think I should let the writers get their stories in before I comment. You never can tell who might be trolling around here these days.

Posts: 80 · Vonage Forum Senior Joined: May 24, 2006 Posts: 80

gfoulks wrote:

I think I should let the writers get their stories in before I comment. You never can tell who might be trolling around here these days.

Ok.. so to clarify; you have been interviewed regarding the Vonage situation?

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

I have... The Wall Street Journal is the biggest one. I was asked to comment for thestreet.com and I had a number of other people asking for me to comment via private message and I never was able to figure who they worked for.

Posts: 80 · Vonage Forum Senior Joined: May 24, 2006 Posts: 80

gfoulks wrote:

I have... The Wall Street Journal is the biggest one. I was asked to comment for thestreet.com and I had a number of other people asking for me to comment via private message and I never was able to figure who they worked for.

Very interesting.
Please posts links to any articles that might result from your comments as you become aware of them.

Posts: 18 · Vonage Forum Associate Joined: May 21, 2005 Posts: 18

This is from an article in tomorrows WSJ (which is already online):

One online forum, vonage-forum.com, had many Vonage customers unhappy with their investments. Greg Foulks was allocated 500 shares of Vonage but now is trying to decide whether he should stop payment on his $8,500 check. He worries the tumult surrounding the IPO could prompt Vonage to scrap the whole deal.

"It's a big mess and we need Vonage to provide some answers," Mr. Foulks, of Columbus, Ohio, wrote in an email. "Meanwhile I'm stuck with a dog of a stock that will likely see $6 in the coming months."

Posts: 18 · Vonage Forum Associate Joined: May 21, 2005 Posts: 18

But probably more important for everybody who purchased the stock, the beginning of the same article:

Vonage Will Pay Underwriters
For Shares Its Users Don't Want

By DIONNE SEARCEY and IAN MCDONALD
May 31, 2006

Vonage Holdings Corp., which just conducted one of the most unsuccessful initial public offerings in nearly two years, has offered an unusual contingency to its underwriters: If the Internet phone company's customers balk at agreements they have made to buy shares, Vonage will cover the cost.

Posts: 292 · Vonage Forum Master Joined: Oct 08, 2004 Posts: 292

From The NY Times:

Vonage Moves to Reassure Nervous Investors

By KEN BELSON and MATT RICHTEL
Published: May 31, 2006

Vonage, tarred by a disastrous initial public offering last week, is scrambling to reassure investors. The company, which provides Internet phone service, said yesterday that it would reimburse the bankers who handled the sale if any Vonage customers refused to pay for shares that were allotted to them.

Vonage gave its customers a chance to buy as much as 15 percent of the 31.25 million shares that were offered last week. About 10,000 of the company's 1.6 million customers ultimately received shares, which were sold at $17 each, according to a person briefed on the deal. Customers had until yesterday to open an account with a specified broker and pay for their shares.

Some customers who participated in the "directed share program" were reluctant to pay for their shares after the stock fell. The shares have lost more than 26 percent of their value since their debut last Wednesday. They fell 52 cents, to $12.50 yesterday.

Vonage said in a statement given to the "Squawk Box" program on CNBC: "While all avenues are available to us, we cannot imagine alienating our customers in that way." The company added that if some participants in the program did not pay, "we expect to repurchase the shares from the underwriters if necessary."

The company's assurances are consistent with regulatory filings it made earlier that said it would cover the bankers if necessary.

Brooke Schulz, a company spokeswoman, declined to say how many customers had not paid for their shares in the program.

A few investors posted angry notes on Vonage-related Web sites saying they were unwilling to pay for their shares. Some blamed the company and bankers for overvaluing the shares.

"There is no way I am paying for this and you are out of your minds if you do," read one posting from someone using the name "ipobust."

Vonage, which has racked up hundreds of millions of dollars in losses in part because of its aggressive marketing campaign, does not want to spend more to retain angry customers, analysts said.

"Clearly they've gotten a significant amount of bad press, and for a company spending a lot of marketing to get customers, they will have to spend even more to keep customers from defecting," said Richard Greenfield, an analyst at Pali Research. "It appears that management feels that the directed stock program could backfire and result in higher churn," or customer turnover, he added.

Mr. Greenfield, who has a sell rating on the stock, said the shares were fairly valued at $11.50.

However, Albert Lin, an analyst at American Technology Research, said shares of Vonage could rise to $20 in 6 to 12 months because its cost of finding new customers was relatively low.

He added that the company could become a "tremendous acquisition target."

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

and there you have it.... Not a link but the gist of the article.