Considering not paying for your shares - read this first

Posts: 2251 · Posted: Wed May 31, 2006 11:30 pm Post subject:

navydavy2001 wrote:

Dan, I need some levity. Please start posting the "Cheerleader" after these posts. Very Happy

GIVE ME A V !!!

Posts: 66 · Full Forum Member Joined: May 25, 2006 Posts: 66

Quote:

I am just a regular Joe who has some faith in the long haul.

Personally I feel that faith is misplaced. I see no future for Vonage that is profitable. I think the most likely outcome is an ISP buying the whole ship (which I can see happenning at a single digit figure share price).

So, I'm curious, what's your view of the long term?

Posts: 1123 · Vonage Forum **MVM** Joined: May 26, 2005 Posts: 1123

Thank you much! It's still very wierd, yet mesmerising. Very Happy

Posts: 1 · New Forum Member Joined: Jun 01, 2006 Posts: 1

Hi,

I filled out the DSP registration through vonageipo.com but didn't open a brokerage account to actually reserve shares. This means I'm off the hook and Vonage can't try to collect anything from me, correct?

I never said i wanted X shares allocated to me.

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

hypnotik wrote:

Hi,

I filled out the DSP registration through vonageipo.com but didn't open a brokerage account to actually reserve shares. This means I'm off the hook and Vonage can't try to collect anything from me, correct?

I never said i wanted X shares allocated to me.

Correct.
If you never requested shares, you were not allocated shares.

Posts: 29 · Vonage Forum Junior Joined: May 30, 2006 Posts: 29

I'd really consider paying up...

From the New York Times today...

Vonage May Seek Payment From Balking Share Buyers
Sign In to E-Mail This Print Reprints Save

By MATT RICHTEL
Published: June 1, 2006
SAN FRANCISCO, May 31 — Vonage, the Internet telephone provider, said on Wednesday that it might seek reimbursement from customers who fail to pay for shares they committed to buy during the company's disappointing initial public offering last week.

Wednesday's statement continues Vonage's public relations and financial struggle since it went public last week. Its shares have dropped almost 29 percent from their $17 opening price, closing on Wednesday at $12.02

The offering was supposed to be a coming-out party for Internet phone technology, a concept Vonage helped pioneer. As part of the offering, customers were given the chance to buy as much as 15 percent of the shares.

Some 9,000 customers took the company up on the offer but after the share price plummeted, a portion of the investors have now balked at paying for shares they committed to buy. On Tuesday, Vonage said it would reimburse the banks that handled sales to customers should any refuse to pay for shares allotted to them.

But a Vonage spokeswoman, Brooke Schulz, said on Wednesday that the company might pursue those customers who fail to pay for the stock they committed to buy.

"We're reserving our right to pursue customers for payment," Ms. Schulz said. She added the company would "take action should we deem it necessary."

Ms. Schulz declined to say how many customers have failed to reimburse the banks for shares.

Telecommunications industry analysts have said that Vonage is being met warily by public market investors because Internet telephone competition is getting more intense, particularly as cable companies adopt aggressive tactics.

Posts: 3 · New Forum Member Joined: May 26, 2005 Posts: 3

All of this makes me quite happy that I didn't participate in this mess. I knew it couldn't be a good thing when the former CEO of Tyco became the new president of Vonage. The writing was on the wall.

As for my Vonage service, I'm still on the fence as to wether or not I wish to continue supporting a company that has the reputation which Vonage has worked hard to generate over the years. Vonage isn't the cheapest/best/most-reliable choice out there anymore, so only time will tell what path I, and many others, end up taking.

Posts: 29 · Vonage Forum Junior Joined: May 30, 2006 Posts: 29

Yet another article stating the same...

IPO REPORT
Vonage wants customers to pay up
Telephone firm bares teeth in IPO allocation program
E-mail | Print | | Disable live quotes By Steve Gelsi, MarketWatch
Last Update: 9:21 AM ET Jun 1, 2006

NEW YORK (MarketWatch) -- Vonage, which has quickly gathered a customer base of nearly two million by offering cheaper phone service, signaled that it could be running into trouble getting the same group to pony up $17 a share for its IPO after the deal has dropped to $12.
The company said late Wednesday that if customers don't fork over cash for the shares they ordered, "we will reserve our right to pursue payment," Vonage spokeswoman Brooke Schulz told MarketWatch.
"To be clear, we have not offered and are not offering to repurchase any of the shares of common stock from our customers," the company said in a statement late Wednesday.
In the bubble days, retail investors used to clamor for IPO shares which got doled out to the richest customers, who sold them for quick cash.
In a move to get its customer on board in the IPO, Vonage (VG : Vonage hldgs corp com
News , chart, profile, more
Last: 12.11+0.09+0.75%

11:38am 06/01/2006

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
VG12.11, +0.09, +0.7%) allocated about 4.2 million shares available to any of its 1.6 million customers who first took out accounts with Smith Barney, Deutsche Bank or UBS -- the underwriters of its IPO. See full story.
Some 9,000 to 10,000 customers agreed to buy them, according to people familiar with the matter, cited by the Wall Street Journal.
Since the IPO debuted a week ago, however, shares have fallen from the IPO price of $17 to $12 in one of the worst performances in years. See full story.
If customers don't follow through on purchase plans, the company could be on the hook with its bankers.
According to Vonage's IPO prospectus, 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."
Companies often set aside IPO shares for select pools of buyers such as friends and family, but such stock for customers hadn't been seen since a series of microbreweries went public back in the 1990s, said IPO observers.
In one bright spot for Vonage, Soleil Securities Group on Wednesday upgraded its shares to equalweight from underweight and maintained its $13 price target.

Posts: 7 · New Forum Member Joined: May 31, 2006 Posts: 7

rudedog40 wrote:

I'd really consider paying up...

From the New York Times today...

Vonage May Seek Payment From Balking Share Buyers
Sign In to E-Mail This Print Reprints Save

By MATT RICHTEL
Published: June 1, 2006
SAN FRANCISCO, May 31 — Vonage, the Internet telephone provider, said on Wednesday that it might seek reimbursement from customers who fail to pay for shares they committed to buy during the company's disappointing initial public offering last week.

Wednesday's statement continues Vonage's public relations and financial struggle since it went public last week. Its shares have dropped almost 29 percent from their $17 opening price, closing on Wednesday at $12.02

The offering was supposed to be a coming-out party for Internet phone technology, a concept Vonage helped pioneer. As part of the offering, customers were given the chance to buy as much as 15 percent of the shares.

Some 9,000 customers took the company up on the offer but after the share price plummeted, a portion of the investors have now balked at paying for shares they committed to buy. On Tuesday, Vonage said it would reimburse the banks that handled sales to customers should any refuse to pay for shares allotted to them.

But a Vonage spokeswoman, Brooke Schulz, said on Wednesday that the company might pursue those customers who fail to pay for the stock they committed to buy.

"We're reserving our right to pursue customers for payment," Ms. Schulz said. She added the company would "take action should we deem it necessary."

Ms. Schulz declined to say how many customers have failed to reimburse the banks for shares.

Telecommunications industry analysts have said that Vonage is being met warily by public market investors because Internet telephone competition is getting more intense, particularly as cable companies adopt aggressive tactics.

Call me a gambling man, but I was willing to take a 'risk' last night when I stopped payment on my UBS check... Worst case, Vonage actually ends up with some legal standing to force people who balked to pay up and I have to reissue that check, and that is a fairly unlikely scenario at this point.

I love Vonage's service, but I am unwilling to fall on my proverbial sword for an IPO that was, and continues to be, mishandled by both the company itself and the pig makeup artist underwriters.

Posts: 57 · Full Forum Member Joined: Sep 03, 2005 Posts: 57

Quite frankly, I think people here put too much weight on VG losing customers. For one, I am not leaving VG. It’s working out great for me. The day I leave VG is the day I decide the price and service are no longer right. It won’t be because of the IPO debacle.

Only 10,000 customers purchased shares, so 10,000 will leave VG. Big deal. 1,690,000 won’t care about the IPO fiasco and hold the same rational as I do. If you think VG cares about 10,000 defections, you are sadly mistaken. So that card won’t work for you no matter how loudly you play it here.

VG has a great deal of work on its plate (such as figuring out how to turn a profit), rather than dealing with the hurt feelings of 10,000 customers. All 10,000 can leave. It’s easy to gain 10,000 subscribers if price and services are right.

You have made a investment mistake by ASKING for shares, period. Let it go and move on. What if the shares reach $40 in six months? Would you play victims again by not paying for it now?

Dconner, glad you are a die hard VG stock supporter, nothing wrong with that. But if I were you, I would stop buying everyday. It’s too expensive right now. It will go to the single digit. Unless money is not a issue for you, you might want to save some cash.