Considering not paying for your shares - read this first

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

Not balking at paying for your shares, if you haven't yet, would be playing the "victim". And what are you smoking? "What if the stock hits $40"?!?!? If the stock hits single digits, which many think it will - including you, then Vonage becomes a (cheap) acquisition target at that point - so the likelihood of any long-term continuation of business 'as normal' leading to a higher stock price is very unlikely at this point.

I will continue using Vonage and enjoying the nicely priced service, I just won't do it while watching the money I (could have) put into the IPO go down the drain.

libbyloo wrote:

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.

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
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Last: 12.11+0.09+0.75%

11:38am 06/01/2006

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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: 1 · New Forum Member Joined: May 23, 2006 Posts: 1

Those of you who are not paying for your IPO shares are fools and jerks. I hope you all get sued.

You clicked your consent dozens of times where it stated "YOU MAY LOSE ALL OF THE MONEY YOU INVEST"

You knew it was a risky gamble, and lost. And now you cry.

I feel for you, but it is just plain dishonest to not pay now. They clearly outlined the risks in the prospectus, you would not be complaining if the stock went up.

I for one will be purchasing shares soon. I think the price is bound to go up alot in the long run.

Posts: 10 · Vonage Forum Associate Joined: May 01, 2004 Posts: 10

ckudrna wrote:

An IPO for a company is supposed to be a really good event, a sign of prosperity and achievement. Vonage's IPO has been a laughing stock. I refuse to be involved with any sort of company like this.

an IPO is basically a form of gambling. I've seen many IPOs in the tech field fail miserably. You were expecting to make money, even when everywhere on the site it said you may lose it. Your gamble didn't pay up. At this point, I don't think you have a leg to stand on and Vonage may come after you with full legal force.

The other thing to remember, as others have pointed out, IPOs are more designed for longer term investments, not quick make money and sell. Some IPOs require you to hold onto the stock for x amount of time before selling. I've participated in some of those. Stock will drop 50% in the first week, and 6 months later, its tripled in value. Don't completely give up on it. Voip is a shaky business at best with all the rules possibly coming down the pipe.

Posts: 75 · Vonage Forum Senior Joined: Jun 01, 2006 Posts: 75

ckudrna wrote:

I am not paying a cent for this.

They came out today and said that they will buyback shares from the underwritters (which was an official media release from Vonage, not just a rumor), and now they say everyone must pay. I have had enough of this company, refuse to pay for these shares, and am canceling my Vonage service, not because it is not a good service, just because i have lost all faith and trust in this company.

Vonage is basically saying that they're not going to leave the underwriters holding the bag for Vonage customers who refuse to pay. All this means is that the underwriters won't have to come after you if you fail to pay for your shares because Vonage will do it themselves.

ckudrna wrote:

An IPO for a company is supposed to be a really good event, a sign of prosperity and achievement. Vonage's IPO has been a laughing stock. I refuse to be involved with any sort of company like this.

As goalie said, all IPOs are a gamble. You gambled and lost, and now you're upset. IPOs rarely make money for Average Joes. The real money is made by 3 groups - 1) executives and early employees of the company, 2) early investors (e.g. VC firms), and 3) (usually, but not always) large financial institutions who flip the stock early.

Vonage NEVER showed any signs of being the next Google. If you really read the prospectus, you would have realized just how big of a gamble this stock was. Vonage didn't offer its customers an opportunity to participate in the IPO because they are nice guys. They did it because they knew there wasn't enough demand from investment banks.

Posts: 476 · Posted: Thu Jun 01, 2006 4:18 pm Post subject:

http://news.moneycentral.msn.com/ticker/article.asp?Symbol=US:VG&Feed=AP&Date=20060601&ID=5739438

Quote:

Vonage Holds Customers to IPO Pledge

HOLMDEL, N.J. (AP) - Ending speculation, Internet phone company Vonage Holdings Corp. said customers who agreed to buy into its initial public offering last week must follow through on their commitment to buy shares, even though they have fallen more than 29 percent in value.

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

blakadher wrote:

http://news.moneycentral.msn.com/ticker/article.asp?Symbol=US:VG&Feed=AP&Date=20060601&ID=5739438

Quote:

Vonage Holds Customers to IPO Pledge

HOLMDEL, N.J. (AP) - Ending speculation, Internet phone company Vonage Holdings Corp. said customers who agreed to buy into its initial public offering last week must follow through on their commitment to buy shares, even though they have fallen more than 29 percent in value.

Talk is cheap - Vonage can now shout from the mountain tops that everyone has to pay, but given that we all know the company has to cover their underwriters for any shares not paid for - since it was clearly stated in the prospectus - I'll just sit tight and wait for a formal legal request before I complete my purchase (if the stock totally tanks and I have to pay, it'll be a nice capital loss come tax time). Given that Vonage would appear to have much bigger and more pressing issues at this time, other than a few thousand of us balking at completing our purchase given the cluster#$%^ this IPO has become, I'll wait 'til they get around to "me".

Posts: 476 · Posted: Thu Jun 01, 2006 4:42 pm Post subject:

hustow wrote:

Talk is cheap - Vonage can now shout from the mountain tops that everyone has to pay, but given that we all know the company has to cover their underwriters for any shares not paid for - since it was clearly stated in the prospectus - I'll just sit tight and wait for a formal legal request before I complete my purchase (if the stock totally tanks and I have to pay, it'll be a nice capital loss come tax time). Given that Vonage would appear to have much bigger and more pressing issues at this time, other than a few thousand of us balking at completing our purchase given the cluster#$%^ this IPO has become, I'll wait 'til they get around to "me".

The bad thing (for the people who don't pay) would be if Vonage decided they didn't even want to deal with the hassle trying to get people to pay and just sold the whole thing to a collections agency. At least that way Vonage would recoup some of their costs.

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

Oh no, not a collection agency... not that. Think that would create any ill will - and for those of you pompous folks who think Vonage doesn't care about losing maybe 10,000 customers... Give this little reality a thought...

As a telecom consultant, I am constantly asked about Voip, and specifically Vonage since my friends, family, and colleagues know I have their service. If I get pissed, dump them as my provider, and rather than start singing their phrases to those that ask - I start bad mouthing them and telling people to not even consider them, how much future revenue is that going to cost the company?

Given that bad mouthing a service provider that you've had bad dealings is a general phenomenon, not just to those of us that work in the industry, how much more revenue with be lost?

Additionally, a simple letter to the reporting agencies stating the suspect occurences with the IPO (not being able to access the online limited brokerage accounts to sell quickly, before losing my @$$) were why I chose not to pay would suffice...

but feel free to be led like sheep if it fits you...

Posts: 476 · Posted: Thu Jun 01, 2006 5:12 pm Post subject: Re: Please...

hustow wrote:

Oh no, not a collection agency... not that. Think that would create any ill will - and for those of you pompous folks who think Vonage doesn't care about losing maybe 10,000 customers... Give this little reality a thought...

As a telecom consultant, I am constantly asked about Voip, and specifically Vonage since my friends, family, and colleagues know I have their service. If I get pissed, dump them as my provider, and rather than start singing their phrases to those that ask - I start bad mouthing them and telling people to not even consider them, how much future revenue is that going to cost the company?

Given that bad mouthing a service provider that you've had bad dealings is a general phenomenon, not just to those of us that work in the industry, how much more revenue with be lost?

Additionally, a simple letter to the reporting agencies stating the suspect occurences with the IPO (not being able to access the online limited brokerage accounts to sell quickly, before losing my @$$) were why I chose not to pay would suffice...

but feel free to be led like sheep if it fits you...

Hmm, which is more pompous: thinking that Vonage will write off 10,000 customers (actually less since many probably already paid for their shares) to get some of their money back or thinking that you can hurt Vonage by bad mouthing them and no longer recommending people use their service?

By all means, everyone should make their own decision on whether to pay up or not. On the same token, everyone should consider all possible ramifications before making that decision.