SmithBarney in no rush to collect cash

Posts: 3 · New Forum Member Joined: May 30, 2006 Posts: 3

I agree with all the posters(?) who believe in honoring the commitment made by customers throught the DSP. Not paying for the shares alloted is sort of a sleazy way out, unless one tried to sell and couldn't, or found shares in the account when they thought none were allotted, etc.

However, I see no need to send the money in until the last possible minute. I called Smith Barney last Thursday to find out what the latest I could pay is, and they told me Friday, but Tuesday would be okay, too. Today, leaving my house with check in hand, I decided to call again, to see if it was really due today, and I was told today would be good, or "anytime in the next few days would be okay too." (I used the Smith Barney number provided on the Vonage-IPO website.)

The money is on its way back to a high yield ING savings account for now. I'll call again in a few days and see what they say. Although I won't be surprised if a major announcement is made before then.

Posts: 3 · New Forum Member Joined: May 31, 2006 Posts: 3

I really don't see how Vonage could bail out just the people who don't pay for their shares without opening up themselves to major lawsuits from all the people who did meet their obligation and pay for their shares. It seems if they buy back the shares that people reneged on, they HAVE to do something for the people who met their obligations and paid for their shares. If not, they will alienate more people than they would alienate by forcing the other folks to pay !

Posts: 31 · Vonage Forum Junior Joined: May 21, 2006 Posts: 31

jimbocobb wrote:

I really don't see how Vonage could bail out just the people who don't pay for their shares without opening up themselves to major lawsuits from all the people who did meet their obligation and pay for their shares. It seems if they buy back the shares that people reneged on, they HAVE to do something for the people who met their obligations and paid for their shares. If not, they will alienate more people than they would alienate by forcing the other folks to pay !

God! That is so true! This is a proposterous idea. The VERY best customers are the ones who bought stock, and then sent in their money - to reward those renegs (and not other Direct purchase customers) - would be incredibly bad policy!!!!!!!!!!!

I am furious at the thought of that!!!!!!!!!!

Posts: 3 · New Forum Member Joined: May 30, 2006 Posts: 3

I'm with you on the sentiment, it appears to be completely unfair and I can't imagine Vonage would want to take such a major blow in PR and customer loyalty. They've obviously worked very hard and spent tons of $$ in trying to generate a positive image.

Legally, however, I think they are within their rights to buyback the stock and the class-action talk around this forum is garbage. I believe I read in the prospectus somewhere that Vonage would indemnify the underwriters for any shares abandoned without payment by DSP customers. Can't find where I read that, but the last paragraph in the "Underwriting - Direct Share Programs" section (Page 140) reads:

"We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or to contribute to payments the underwriters may be required to make because of any of those liabilities."

This statement may not include the buy-back option we're talking about, but I'm pretty sure I read that somewhere. My apologies in advance if this is not correct.

More importantly, however, Vonage likely understands that this isn't about legalities, it's about PR, customer satisfaction and the future. I can't imagine they would choose to anger so many customers who have already paid.

I haven't paid yet because SB keeps telling me I have more time. I'm not happy at all that I may still have to pay for this crappy stock (not just because I agreed to, but because I don't want to risk a negative mark on my credit report).

Maybe somebody can enlighten me, but if we as investors thought the deal was a bargain at $17, then why aren't we buying more at $12.50? Has something worsened on the balance sheets in the past 7 days?

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

MB2006 wrote:

Maybe somebody can enlighten me, but if we as investors thought the deal was a bargain at $17, then why aren't we buying more at $12.50? Has something worsened on the balance sheets in the past 7 days?

What changed? support, that's what changed. The IPO priced midrange and the allocations were reduced giving the impression that there was decent support for the stock. Ten minutes after the open the decline has not stopped as investors are dumping the stock left and right. The CFO was to appear on CNBC yesterday but then the story broke about a group of investors who are not going to pay for their shares, the company is allowing this to happen and the CFO then cancels his visit to CNBC with the company stating that it canceled for fear of violating the quite period, (then why did they schedule it in the first place?)

Now those of us that did pay for the stock are left holding the bag.

The company is not making any statements and the perception is that the company is taking whatever money it can and running with it. I smell a rat and this why the stock is no longer attractive to me at these levels.

Posts: 11 · Vonage Forum Associate Joined: May 22, 2006 Posts: 11

jimbocobb wrote:

I really don't see how Vonage could bail out just the people who don't pay for their shares without opening up themselves to major lawsuits from all the people who did meet their obligation and pay for their shares. It seems if they buy back the shares that people reneged on, they HAVE to do something for the people who met their obligations and paid for their shares. If not, they will alienate more people than they would alienate by forcing the other folks to pay !

You are exactly correct, If Vonage does this I am cancelling my service asap and will never recommand Vonage to anyone again. Rewarding those who "refuse to pay" is like taking a kid to the ice cream shop after stealing a car.

Posts: 11 · Vonage Forum Associate Joined: May 22, 2006 Posts: 11

btrader wrote:

jimbocobb wrote:

I really don't see how Vonage could bail out just the people who don't pay for their shares without opening up themselves to major lawsuits from all the people who did meet their obligation and pay for their shares. It seems if they buy back the shares that people reneged on, they HAVE to do something for the people who met their obligations and paid for their shares. If not, they will alienate more people than they would alienate by forcing the other folks to pay !

God! That is so true! This is a proposterous idea. The VERY best customers are the ones who bought stock, and then sent in their money - to reward those renegs (and not other Direct purchase customers) - would be incredibly bad policy!!!!!!!!!!!

I am furious at the thought of that!!!!!!!!!!

Looks like there are several of us on this forum in the same boat, with the same attitude. I am just FUMING at the thought of Vonage "paying off" the shares for those who simply washed their hands of this deal.

Posts: 8 · New Forum Member Joined: May 24, 2006 Posts: 8

No one forced us to buy those shares. We all knew the risks. What kind of message am I sending my son about investing? If it would have went up and we all made money no one would be saying anything but skittles and rainbows. I paid for my shares today and took the loss as a learning experience. Move on.

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

RunningMan your missing the point. I don't belive that anybody here who is still a holding investor is disagreeing that what we did was the right thing to do. We committed to a number of shares and we paid and most like you and I were and are willing to take the loss.

As an investor in this company however, you should be outraged that the company is allowing 1000 or more investors who committed to a number of shares (which by the way caused the demand which helped to determine the price you paid for the IPO) to simply walk away and be made whole. No penalty, nothing. That is the point being made and I'm surprised that this does not anger you.

Posts: 11 · Vonage Forum Associate Joined: May 22, 2006 Posts: 11

RunninMan wrote:

No one forced us to buy those shares. We all knew the risks. What kind of message am I sending my son about investing? If it would have went up and we all made money no one would be saying anything but skittles and rainbows. I paid for my shares today and took the loss as a learning experience. Move on.

Yes you're right, you paid for your shares as did I and expected to simply get on with life. However, if I find out that Vonage is bailing out people who signed up for the IPO but decided not to send in their money I won't be happy at all.