Underwriters

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

While I am still wavering on whether or not to stop payment on my check tonight, before UBS deposits it, I am also thinking of the three underwriters for this IPO, who have not been discussed much related to the Vonage IPO.

Everyone who purchased shares should have known there were inherent risks, but given the share price free fall since VG trading began, I am left with the strong feeling that these three underwriting firms failed to do their job, at least in one respect - to price the stock reasonably close to where it should be at for initial and early trading - which at this point would appear to be around $12.00.

Needless to say, this will be the last interaction I have with any of these three firms... Boy did they put some lipstick on this pig!

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

Seeing that the IPO was oversubscribed, I do not necessarily agree that the underwriters mispriced the IPO.

If the underwriters failed, it was in not providing (enough) support for the share price after the stock started trading IMHO.

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

Re: LDTalk -

Seeing that the IPO was oversubscribed, I do not necessarily agree that the underwriters mispriced the IPO.

If the underwriters failed, it was in not providing (enough) support for the share price after the stock started trading IMHO.

You may be right, that the underwriters did honestly feel the IPO would hold the $17.00 price, but I definitely agree that at the very least they appear to have just stepped out of the way as the price dropped - and did nothing to bolster any optimism in Vonage's prospects.

Additionally, while it was an attempted good gesture on Vonage's part to offer shares in the IPO to customers, in hind sight it was not a good move to allow purchases to be made on unsecured funds - allowing some of us the ability to withhold payment or stop payment on check not yet deposited. I don't think you'll see any other companies following the same path in the future.

Ultimately, I do believe Vonage has a good service offering and hope they can dig themselves out of this mess, at the very least to the point where they can continue to exist as a company.

Posts: 3 · New Forum Member Joined: Jun 01, 2006 Posts: 3

Wednesday I read in the NY Times that you were prepared to reimburse the underwriters for any losses they may suffer because a DSP customer refuses to pay for their shares.

Although I am not pleased with the way your ipo was handled in terms of pricing and lack of underwriter support (believe me you should sue them rather than reimburse them), I nonetheless paid for my shares and will soon make a determination to sell or hold. I expect all other holders of DSP shares to be in the same boat.

If a DSP customer refuses to pay for the shares and the underwriter has certain rights to indemnification from Vonage, I expect at the very least they will subrogate the right to collect to Vonage. Should you fail to pursue these rights thereby favoring certain customers to the disadvantage of others, I would regard your failure to do so as a material lack of disclosure in your registration statement. No doubt a class action lawsuit could be in your future, not to mention another round for Mr, Citron with the SEC.

How you handle this very difficult situation in terms of your existing customer base will forever impact Vonage. If i decide to sell my shares and take my losses it will mean that I don't think Vonage has a bright future and I will most likely switch my service to another carrier.

My suggestion would be to rescind the deal asap, or make some timely accommodation to DSP customers as a group. Perhaps the company could turn this mess to its advantage by offering anyone who bought shares at the IPO price free service until the stock recovers to its initial price. Vonage might just pick up enough new customers so as to make the stock regain the value it should not have had in the first place.

This e-mail is really meant to be supportive. I don't want Vonage to waste its money on lawyers rather than increasing its user base. The most important thing you can do is treat everyone equally and fairly.

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

Who are you talking to "ipo"? This is not Vonage here. Read the big disclaimer at the top of the main page.

Posts: 3 · New Forum Member Joined: Jun 01, 2006 Posts: 3

Sorry. This is was the text of e-mail I sent to Customer Support. The response I received was a list of FAO's. I am hopeful that the Company monitors this site and takes some action. This is my first time on a chatroom and I probably should have started a new subject.

Posts: 476 · Posted: Thu Jun 01, 2006 2:45 pm Post subject:

ipo wrote:

Sorry. This is was the text of e-mail I sent to Customer Support. The response I received was a list of FAO's. I am hopeful that the Company monitors this site and takes some action. This is my first time on a chatroom and I probably should have started a new subject.

Wasn't there an investor relations email address floating around these forums? I think that's the address you'd want to send such correspondence.

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

Yes how about trying

ir@vonage.com or http://ir.vonage.com

you might actually have a better chance of someone reading your message.

Posts: 16 · Vonage Forum Associate Joined: May 31, 2006 Posts: 16

Has anyone bothered to question why/how a company that is bleeding a couple million dollars a week should do an IPO? Or why any sane investor would buy into an IPO from a company that is bleeding a few million dollars a week (with no end in sight)?

To answer both questions: Greed. The IPO is the end game for Vonage. Suck up the cash and dash. Investors were hoping that it was some kind of rebirth of the Internet bubble but all they got (or are going to get) is the burst.

My suggestion would be to dump now. Unless you need a lot to write off on taxes. The hold until you reach that special level of pain.