Yesterday, I wrote about a source informing me that Vonage plans on opening their SIP credentials. The source also mentioned that Vonage planned on waiting to drop the $9.99/month requirement to get SIP credentials until AFTER their IPO offering since they wanted the softphone users on the "balance sheets" for a better IPO. (Many Vonage users sign up for the softphone just to get access to the SIP credentials to use with SIP hardphones) He even said the IPO would be coming "very soon", but with so many rumors about a Vonage IPO, I decided not to mention it in my blog yesterday. If only I knew HOW soon. I should have trusted my source and published his IPO comment, since today Vonage announced their intention to raise $250 million in an IPO. Oh well, hindsight is 20-20.
Update:
Very interesting - Vonage is going to allow their customers access to the IPO! That's a nice way to reward their customers!
Some info from http://www.ipoinfo.vonage.com/
You have reached the website regarding the proposed initial public offering of Vonage Holdings Corp. common stock, including a proposed directed share program for certain Vonage customers. Both the proposed initial public offering and the directed share program are described in the registration statement of Vonage Holdings Corp. filed with the Securities and Exchange Commission on February 8, 2006, a copy of which can be found on the Securities and Exchange Commission's website at www.sec.gov
As indicated in the registration statement, we intend that Vonage customers will be eligible to participate if:
- they opened accounts with us on or prior to December 15, 2005, and
- maintained their accounts in good standing through February 1, 2006, and
- are a U.S. citizen, and
- reside in the U.S. when the offering closes, and
- have a valid social security number.
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How does Vonage compare to InteleFone in your opinion? Does Vonage provide service for dial-up customers? Do they have a compression chip built into their phones? Do they give away free phones? To view InteleFone products visit http://www.ClaimYourPhone.com
I am a happy Vonage customer. So when I received the invitation to participate in its IPO, it made me curious. But after reading about the background of Jeffrey A. Citron (Vonage's "principal stockholder, founder, Chairman and Chief Strategist" and former CEO) and his run ins with the law, it made me nervous. More importantly, I decided not to participate in the IPO. You can read all the juicy details here:
http://www.sec.gov/cgi-bin/browse-edgar?company=vonage&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany
In my opinion, this clearly is an individual who puts his own interests first – above those of his shareholders or customers. Given the increased competition in VOIP from the big players (AT&T, Verizon, etc.), I think the IPO is a desperate attempt by Vonage execs to cash out before the competition beats them down, especially since it was reported that Vonage is now allocating 15% of IPO shares to its customers. In the really hot IPOs, do the customers ever get to participate to such an extent?
After the IPO, Citron will own approximate 31% of Vonage. If its shares are priced at $14 - $16 dollars (as the company hopes it will be), then Citron will hold Vonage shares worth approximately $775 - $872 MILLION! And you don't think he's trying to cash out?!?