Vonage going IPO

Diashto writes "I just recieved voicemail on my Vonage phone saying that Vonage is going IPO, and that certain customers may be eligible to purchase common stock at IPO pricing. More information is is available on their IPO site."

Comments

they need to.

[Churla]

To raise money for the new "SO you want to actually GET THROUGH to customers on our cablemodems" tariff which is upcoming.

Re:they need to.

[Pollardito]

i would expect that once companies start putting the pay-to-use-my-pipe plans in action, that the amount that they charge a company like Vonage to run over their line is deliberately more than what you'd pay for a phone call on that same line. nearly everyone that offers you internet service also wants you to buy their phone service, so there really isn't a way to switch providers to someone that won't share the same agenda

Re:they need to.

[ahsile]

My employer is actually considering making this a cost for the consumer. Was something along the lines of adding "jitter" so that VOIP conversations will be useless until you pay their extortion fee.

Re:they need to.

[dgatwood]

Please tell us what ISP so that I can add them on my "cold day in hell before I use their service" list right alongside Earthlink.

Re:they need to.

[ahsile]

We're not talking ISP... we're talking national telecommunications.

Re:they need to.

[FreekyGeek]

"I'm a fiscal conservative, it's a pity we don't have a political party anymore"

You do have a party, it's called the Libertarian Party. It doesn't get more fiscally conservative than that. Hmmm, freedom for individuals, weak government, fiscally conservative... sound interesting? No wonder the other two big parties don't want you to find out about us.

Re:they need to.

[neomajic]

coughComcastcough

Re:they need to.

[KUHurdler]

FYI, I just got a "voicemail" spamming me about the new IPO. If this kind of crap continues, I'm going to drop them.
    I figure there's probably many like me that will behave similarly.

Re:they need to.

[baseballgirl]

I'm new so bear with me. I have a two-fold question. I,too, am a Vonage customer and am IPO eligible. However, Vonage can't do what I need it to do, which is to take analog data through digital voip and transfer back in to analog. The connection does not last or the output is garbage. I had to drop that Vonage line and go back to SBC/DSL. I am at this moment paying 0.035 centa a minute and my LD phone bill is 400/mo. My question is this, will a Fiber Optic line take care of my analog/digital/analog issue? If so, then forget Voange, I'll buy a fiber optic stock!..if not, I'll do the IPO!..thanks. for the input..mc

I just received email...

[Ingolfke]

about my long lost uncle who used to work for the oil companies in central Africa. He apparently left me $5 million and all I need to do is contact his Nigerian legal representation.

Re:I just received email...

[Anonymous Coward]

hehe, it's always fun in these situations.. the key though is to share *wink wink*.

No, seriously, I'm looking for investors for a revolutional idea. Write me back; funkybenn at hotmail.com

I received...

[BarC0d3z]

... an email about the voice mail. It's either legit or the 409ers managed to get my email address

• and

phone number. Regardless, I think this is better than most IPOs who only offer to the elite brokerage houses, and better than Google where it was anyone's game. Offer to those who have a history of support.

Re:I received...

[Zaphod2016]

Here here!

As a loyal customer of Vonage, who has helped recruit a few of those "million strong" customers they are now bragging about, I feel its only fair.

A good start, and a nice ethical move in a place where ethics can be rare (Wall St).

Sounds great ... but.

[grunherz]

I'm a Vonage customer since 2004 and I received the IPO e-mail a few days ago. If you're in the same boat I highly recommend reading their risk prospectus first. They will be posting losses for the foreseeable future.

Not a deal-breaker but just a heads up.

Re:Sounds great ... but.

[imadork]

I'm out of mod points, so I'd like to reiterate that I looked into this, and I'm not going to touch it with a 10-foor pole. They spend almost every dollar in revenue they make on marketing, and borrow money to keep their business running. IIRC ( I don't have the prospectus in front of me), but they made $250 mil last year and spent close to $400 mil. When you combine their assets and their debts together, the company is worth less than zero. But this IPO will raise something like $400 mil, and since they're offering about 20% of their outstanding stock they're effectively valuing the company at $2 billion. It's not 1999, folks. It might be possible to buy in at the IPO price, and then flip it for a gain that day. But I like my odds in Vegas better. If you like the long-term prospects, wait a little while and I htink the price will dip below the IPO price....

Re:Sounds great ... but.

[Anonymous Coward]

I have had Vonage for 2 1/2 years now. What they offer now is identical to what they offered then, a service best described as "okay".

Web based interface to voicemail is identical. Simple. Poor. I cannot label/annotate/retitle/file/mark-undeletable messages.

I cannot block calls with no caller ID.

They promised me a real E911 within two months. 2 1/2 years later still no E911. Two years ago it was clear that the telcos were making it difficult for them to implement E911. Now, it seems to be Vonage's problems alone.

I assume they are the market leaders, but with eBay behind Skype, ... for how long?

I would feel better about them technically if they had improved any portion of their service, but it is identical, with no new value for my dollar in 2 1/2 years.

I suspect this IPO will be used to fund the upcoming fights against Verizon and AT&T. It's not clear they will be the winner.

Hey Vonage, as you read through the posts, understand that if you had implemented E911 on time as you had promised me, I wouldn't be writing this.

Posted anonymously: I do want my service (such as it is) to continue unimpeded.

Re:Sounds great ... but.

[955301]

Posted anonymously: I do want my service (such as it is) to continue unimpeded.

wow, that's either genuinely paranoid or really self-centered. You think they will read slashdot, correlate your slashdot account to your real name or vonage account name, look up your account, then cut your service?

Sorry dude, but none of us are that important.

Re:Sounds great ... but.

[myatmpinis1234]

I agree. I have also been a customer for several years with two lines. The last two things I needed from them I was unable to do. One is to forward my line to an international number and pay the international rate. They apparently only can forward to US/Canada numbers. I also asked about switching to the Wifi Phone. They wouldn't even let me pay for it. Support told me I needed to purchase an additional line from them to get it. Ridiculous.

Re:Sounds great ... but.

[955301]

On top of that, hemoraging all their income on marketing repeatedly emphasize the massive risk associated with buying the stock at IPO. "Neither Vonage nor any of the underwriters are recommending that you purchase Vonage common stock in this program."

Last of all, at least if you are using Firefox, you can't get through all of the steps - they refer to a next button which isn't there.

Re:Sounds great ... but.

[lowrydr310]

Their commercials alone are enough to keep me far far away. I watch about 2 hours of television a week, and in those two hours I hear their goddamn F#$%@ commercial with that goddamn F#$@% 'song' several times.

VoIP offerings from cable companies are ridiculous as they're often far more expensive than Vonage, and there are several other VoIP companies that offer at least the same service as Vonage and cost the same or sometimes less.

Vonage is a tech company. After seeing what happened to Google (tech IPO making money post-.com bubble) there will still be a herd of people who still want in, despite Google actually being profitable and Vonage losing money.

Re:Sounds great ... but.

[TorAvalon]

Speak for yourself

Re:Sounds great ... but.

[Anonymous Coward]

Are slashdotters newbies in the financial world?

First - if you are going to read the red herring (prospectus document) then you need context. Read 5 or 10 of these docs from the IPO of companies you respect or revile (Google, Microsoft, Cisco, Apple). Only with that context will you understand that the prospectus is not meant to inform. It is written as probably the longest legal disclaimer document.

It's easier to summarize all IPO docs: "This offering is for professional investors. You may very likely lose all your money. Gamble if you are interested, but don't whine if you lose your shirt. But due kiss our butts if we make you rich."

Second - VoIP is "hot" area now so a multi-billion dollar valuation for a real company with real customers and no profit is very realistic. Afterall, EBay bought Skype for billions of dollars and that's a company with very little revenue and questionable business model. That sets a value in the market very high for all VoIP companies.

Third - Clearly, the exit strategy for Vonage is simple: Spend everything you can beg, borrow, or raise from others to increase your subscriber count. Then either achieve an economy of scale that lets you eke out a small profit while burying your competition or sell-out to a traditional telco/cableco that wants your large subscriber base and has been on the sidelines through the current VoIP hype and growth while watching their traditional PSTN subscribers decline.

The VoIP market is like the mid-tier days of the ISP market. Get big either by flooding the world with sign-up CD's (AOL) or buying up lots of smaller guys (Earthlink). The remaining little/regional guys either duck-and-cover (survive in niches) or get swallowed up sooner or later.

Lots of VoIP unknowns are now in the market with one marketing strategy "Cheaper than Vonage". That shows you how strong the Vonage brand is but doesn't really say whether the whole market can survive in the long run.

Short term, for your 2nd line or extra line, shop around and get the best deal. I recently dropped one of our Vonage lines and replaced it with a $4.95/mo line from ZingoTel. Has only 100minutes at that price, but that's all I needed for this "extra" line.

Re:Sounds great ... but.

[MrRed]

I'm out of mod points, so I'd like to reiterate that I looked into this, and I'm not going to touch it with a 10-foor pole.

Would it make a difference if you had a 10-foot pole?

Re:Sounds great ... but.

[audi100quattro]

Well said, but lets not forget the part where the offering is only right for an investor if it's below his or her risk threshold.

my .02: The unknown in this is the VoIP market, and recent news about Vonage opening up SIP-credentials and the like, so after-market products can pop-up with asterisk PBX software is very very encouraging (I could imagine myself opening up a neighborhood telephone company, which can provide door service). Vonage doesn't have to offer the products themselves, they just have to collect the monthly fee from the new middle-man. There's a minimum customer-base right there. Growth on the other hand is much harder, and given that telephony doesn't have government made monopolies anymore, the market is bound to be more split-up. Vonage has built up a customer base, and infrastructure with routers that come with remotely upgradeable firmware. While that may not be hard to do for a telco or someone who sells routers, for someone like Vonage, that's quite a feat I would think. With the internet becoming an increasing commodity in most countries, the market should be big, if it wasn't for the telco's of the world. But, will the telco's offer open SIP-credentials?

Re:Sounds great ... but.

[joelleo]

FWIW that "Next" button is just over to the right under firefox. I was able to complete all of the forms under firefox no issues whatsoever, except that little bit.

Re:I'm pretty certain...

[weisen]

The site is registered to the same entity that holds the main Vonage.com registration and it doesn't (currently) say anything about buying the domain. Maybe you hit it right at the start before they shut off domain parking.

Otherside of the coin

[BarC0d3z]

ZDNet blog on why the email/phone pitch is a wrong strategy: http://blogs.zdnet.com/ip-telephony/?p=1086

Missing steps 4-7

[papaia]

Went through the whole process, as instructed on their web site, but step "4" is missing ...

Re:Missing steps 4-7

[imadork]

Safari doesn't render page 4 correctly. I had to use Firefox on the Mac. The site claims to only work with IE.

Re:Missing steps 4-7

[Tenebrious1]

Went through the whole process, as instructed on their web site, but step "4" is missing ...

Step 4 is "Profit!" You don't see it because it's a scam the scammers are the ones who "Profit!".



Ok, really, I don't know if it's a scam or legitimate. But someone other than me always seems to "Profit!".

Re:Missing steps 4-7

[grandin]

scroll to the right

I sense...

[Billosaur]

...a great distrubance in The Force.

IPO = more reliability/quality?

[bepolite]

I have accounts with 2 VOIP providers on 2 different ISPs and still have reliability issues. When everything is working correctly it's *great*, but when there are problems it's very bad. I hope that the extra money from the IPO helps them improve reliability and call quality and not just "enhance shareholder value" (not that there's anything wrong with that!).

Re:IPO = more reliability/quality?

[Mantorp]

I've been using lingo.com for over a year, the only issues I've encountered had to do with my ISP. I pay $20 per month and get unlimited calling to North America and Western Europe, can't beat it (email me and I'll get us both a free month :)). Which voip providers do you use that give you problems?

Re:IPO = more reliability/quality?

[avdp]

Unfortunately, they are completely at the mercy of YOUR isp as far as their reliability is concerned. I have been a customer with them for several years now, and I have yet to have a problem with them that wasn't related to my ISP. Thankfully I have very rarely problems with internet connection, so I am a very satisfied Vonage customer as far as reliability is concerned.

Now, their customer service people are aweful. I only had to deal with them once ever, that was this weekend. Basically after years of good service my original Cisco ATA died. It took about an hour on the phone (talking to several indian people) for them to acknowledge that very obvious fact (my router did not see any traffic coming from the ATA at all). And at the end, their "solution" was for me to go to Best Buy and get a new one at my own expenses (and I can't fill the mail-in rebate because I am not a new customer). That of course, did indeed fix the problem, but left me $60 poorer.

Re:I'm pretty certain...

[Diashto]

Well, it was sent directly to my voicemail, using the lady's voice that is in the voicemail prompting system, from Vonage itself. I'd upload the WAV of the voicemail, but i dont have a server available that can handle /. type of traffic.

An IPO as new customer lure?

[darjama]

Part of me can't help but wonder if this isn't a way to try and draw in customers, people who see it as a way of getting in on their IPO. I'm a current customer, and I'm considering putting a few ducats into it.

Re:An IPO as new customer lure?

[BarC0d3z]

Only eligible for the IPO if you were a customer between Dec 2005 and Feb 2006. Don't have to be a customer now. And anyone joining now won't qualify.

Re:An IPO as new customer lure?

[Chris-the dude]

I am a vonage customer and I got both the voicemail and the email about the IPO. To participate you had to be a customer between december 15 2005 and February 1 2006

Re:An IPO as new customer lure?

[malchus842]

s few ducats is going to be at least $1600, if the pricing on the site is accurate, and could be more ($1800+), depending on how oversubscribed the offering is (if it is at all). You are required to by in 100 share lots. So your investment amounts are multiples of $1600 (again, assuming the price is $16) - $1600, $3200, etc. And putting that much into a speculative stock like this, especailly when they say 'no profits in the forseeable future' is pretty risky. So, yeah, if you have $1600 you can stand to have disappear, go for it.

This isn't to say you can't flip it and make a nice profit if it goes up, but note well you are required to tender 100% of the cost of the purchase before you can get the procedes from any sale, so even if you sell the same day, you can't do this with 'phantom' cash.'

Vonage IPO Questions?

[digitaldc]

Hope this helps

Contact Questions
You may wish to speak with an independent financial or tax advisor before making any decision to purchase Vonage common stock. Neither Vonage nor any of the underwriters are recommending that you purchase Vonage common stock in this program, and they cannot advise you on whether or not to make such an investment.

Contact Us
Technical Customer Care
Phone: (866) 431- 9801
Hours: Open 7 days a week from 8:00 am EST to 8:00 pm EST

Re:Reelin' 'Em in I see

[Churla]

For what it matters. vonageipo.com and vonage.com are both showing identical ownership in Whois. If someone is scamming using this they hijacked or spoofed the name , email, and phone number of the actual vonage DNS admin.

Re:Vonage is a scam

[Technician]

Now people say most people already have broadband so I shouldnt count that in the cost but in that case why shouldnt I just use Skype which is free ? Charging a monthly fee basically for providing a handset is definitely a scam.

I see you were modded a troll, but I'll just assume you don't know what Vontage is. Skype is free. This applies only if you call another Skype user.

What you get for the fee is nationwide calling to regular telephones. Skype out and Skype in are not free. Please compare apples to apples. Vontage includes most of the extras you would get with a phone plan including caller ID, 3 way calling, etc.

Legit or not?

[robbo]

Vonage is indeed doing an IPO and they announced a few days ago that US customers are eligible to buy in. However, the site linked in this story looks like a phishing scam.

Re:Legit or not?

[Peyna]

Not a very good phishing scam. It asks for your Vonage account number, credit card billing zip code and account e-mail address. After that you are required to make a new account with them. If you lose your password, all you can do is get your password e-mailed to you. It doesn't seem to me like they're going to be able to do much.

Not to mention that it appears Vonage did register that domain and if it is a phishing scam it's one of the most detailed and elaborate ones I've ever seen.

Re:Legit or not?

[mtmra70]

Seems legit to me. DNS entries match to the 'T'.

    Domain Name: VONAGE.COM

      Administrative Contact , Technical Contact :
      Holdings, Vonage
      itadmin@vonage.com
      23 Main Street
      Holmdel, NJ 07733
      US
      Phone: 732-365-2603

      Record expires on 12-Dec-2008
      Record created on 12-Dec-2000
      Database last updated on 30-Jun-2004

Domain Name: VONAGEIPO.COM

      Administrative Contact , Technical Contact :
      vonage holdings
      itadmin@vonage.com
      23 Main Street
      Holmdel, NJ 07733
      US
      Phone: 732-365-2603

      Record expires on 25-Apr-2012
      Record created on 20-Feb-2006
      Database last updated on 08-May-2006

Also, if you try to register with bunk info, you get the following:

Registration Failed

The information you supplied did not match any record for a Vonage America customer that may be eligible to participate in the Vonage Customer Directed Share Program.

If you are having trouble registering, please try the following tips:

Vonage Account Number

To find your Vonage account number, please log into your Vonage web account, located at www.vonage.com. Once you log on, you will see your 10-digit Vonage account number in the top right corner of the screen.

Zip Code in the Credit Card Billing Address

You must enter the 5-digit zip code on record with Vonage as part of your billing address as of February 1, 2006. If you have changed your billing address since February 1, 2006, you must use the previous zip code.

E-Mail

You must enter the e-mail address at which the Vonage account holder was receiving Vonage e-mails as of February 1, 2006. This e-mail address is the address to which Vonage may have sent an e-mail notifying you of the Vonage Customer Directed Share Program. This e-mail address does not need to be valid as of today's date, and you will have an opportunity to update this e-mail address later.

Re:Legit or not?

[avdp]

But it isn't... It's completely legit. In additional to the email, all the customers (myself included) got a system broadcasted voicemail. I don't think that spammers/fishers would be able to do that. The voicemail has the same information as the email did.

I also know the email is most likely legit because it was sent to a very specific email address that only Vonage knows and uses (I create a new email alias for each company I deal with. That way I can delete that email address if it gets abused by that company, or a third-party affiliate of that company).

I guess it may have been a mistake on their site to make a brand new domain name for this stuff - not sure what the reason for doing it, but in this day and age it does indeed raise flags about fishing.

Re:Legit or not?

[955301]

Indeed. In fact, I before I thought about that, I tried to login and couldn't, despite being a user since 2003. So I check whois for their registration information. You're right to be wary though - I got greedy and jumped in...

Domain Name: VONAGEIPO.COM
      Registrar: NETWORK SOLUTIONS, LLC.
      Whois Server: whois.networksolutions.com
      Referral URL: http://www.networksolutions.com/
      Name Server: DNS1-NYC.VONAGE.NET
      Name Server: AUTH01.KEWR0.S.VONAGENETWORKS.NET
      Name Server: AUTH00.KEWR0.S.VONAGENETWORKS.NET
      Status: REGISTRAR-LOCK
      EPP Status: clientDeleteProhibited
      EPP Status: clientUpdateProhibited
      EPP Status: clientTransferProhibited
      Updated Date: 08-May-2006
      Creation Date: 25-Apr-2005
      Expiration Date: 25-Apr-2012

Registrant:
vonage holdings
      23 Main Street
      Holmdel, NJ 07733
      US

      Domain Name: VONAGEIPO.COM

      Administrative Contact, Technical Contact:
            vonage holdings itadmin@vonage.com
            23 Main Street
            Holmdel, NJ 07733
            US
            732-365-2603

      Record expires on 25-Apr-2012.
      Record created on 20-Feb-2006.
      Database last updated on 10-May-2006 11:00:43 EDT.

      Domain servers in listed order:

      DNS1-NYC.VONAGE.NET 216.115.31.140
      AUTH00.KEWR0.S.VONAGENETWORKS.NET 69.59.252.42
      AUTH01.KEWR0.S.VONAGENETWORKS.NET 216.115.30.40

Re:Legit or not?

[NM156]

I also know the email is most likely legit because it was sent to a very specific email address that only Vonage knows and uses (I create a new email alias for each company I deal with. That way I can delete that email address if it gets abused by that company

I do the same thing, and my IPO email also came to my vonage specific email address, and I also received the message in my Vonage voice mail box. All these people on here calling this a phishing scam need to take off their tin foil hat for a minute and take a deep breath. Unquestionably, it's a good thing to be vigilant against email scams, but some of the messages here on /. are bordering extreme paranoia.

That said, while this IPO offer is legitimate, some of the concerns expressed here about the financial viability are also legitimate. It is very true that Vonage spends disproportionate amounts of money on marketing, even though it is for a very good reason. It's not unlike what amazon.com was doing in their early days... loss-leader sales in order to get their name to be nearly synonymous with online shopping. Today, they're a Fortune 500 company.

There's inherent risk in investing, but the rewards can be well worth it. Do your research and weigh the risks.

Re:Legit or not?

[sporkboy]

I recieved the same offer in paper mail as well with the matching NJ address and web site listed. I highly doubt there is anything phishy going on.

Re:Reelin' 'Em in I see

[TheRealBob]

I was skeptical too. I checked their domain registration and it matches up with vonage.com. Also, when you enter your account number it successfully looks up your account information, a phishing scam wouldn't be able to do that.

Re:Vonage is a scam

[photozz]

I mean they advertise that you can have unlimited phone calls for 19.95 but never mention in their advertisements that you need to shell out another 40 dollars for cable internet.
First, What kind of **idiot** does not see the multiple notices that you must have a broadband connection available before signing up. Second, Skype is fine, but I would like to use an actual phone when I talk to people, not a headset on my computer. It's an ergonomics thing. I actualy do manage to step away from the screen once an a while. All the solutions I have seen for using an actual phone with skype are complicated and half assed. Most normal people do not want to deal with that level of complexity. Vonage just works, and is simple enough for even my mom to figure out. Besides, Skype is the same sort of scam. No one ever told me you have to have a computer turned on 24 hours a day! moron.

Re:Vonage is a scam

[PoitNarf]

If you don't feel like paying $20 for decent phone service you don't have to. Yes, many households have broadband connections now. Yes, many still retain their regular POTS lines through their phone company. Yes, certain people may only break even in phone bill comparisons from their POTS line + broadband as opposed to their Vonage line + broadband, but that isn't eveyone. When you start factoring in cheaper long distance calls or all the extras like voicemail, callerid, 3-way calling, and numerous other features included in the Vonage service at no additional costs then things start to look better. Bitch about it all you want, but their service provides more than just "a handset".

$$ made from IPO

[dantheman82]

should help to offset pain and suffering experienced when switching to their service, complete with noise, static, and horrible customer service. Perhaps DELL should offer short opportunities when they have bad experiences with customers...

Re:$$ made from IPO

[Phade]

Are you kidding? I am a Vonage customer and I must say the noise, static, and customer service are much better with Vonage than my local phone company. Combine that with the price (basic-ish POTS line here is $40+) and switching to digital phone (in this case, Vonage) was a no-brainer for me. If you have a noisy, static-y line, maybe you need a new phone.

Need to be a citizen?

[srikan2]

I got this mail yesterday, and went and tried to register. However, apparently, permnent residency in USA is not sufficient for that. You need to be a citizen (need to a check a box confirming that "I am a US Citizen" before completing registration).

I've never come across this in any stock/share investing situations....

Re:Need to be a citizen?

[avdp]

I am in the same boat too, and I did find that strange. I wondered if it was a mistake (misunderstanding regulations or whatever) or intentional. It is probably the first time ever that I see myself excluded from something financial from being a permanent resident. None of my banks, credit cards, brokerage firms, or mortgage companies has ever treated me any differently from being a permanent resident.

Oh well. It doesn't matter much, I doubt I would participate in this anyway. Much too speculative for my taste.

Re:Need to be a citizen?

[Peyna]

Gosh - I pay more taxes than the national average. What a rip off ?

So do 49.9% of taxpayers. You're not in any kind of special group there.

Re:Need to be a citizen?

[Stiletto]

Go look up "average" in the dictionary.

Re:Need to be a citizen?

[alexander_686]

The US does have security laws on the books limiting foreign investment in telecommunication stocks. I don't know if Vonage is a telecommunications stock, so if this may or may not be the reason.

This isn't news

[DrSbaitso]

They filed their S-1 a while back. The story is true, despite commenters' claims to the contrary.

Vonage S-1

Sounds like a winner to me...or not

[cdrudge]

From their SEC filings:

Our revenues were $18.7 million in 2003, $79.7 million in 2004, $269.2 million in 2005 and $118.9 million for the three months ended March 31, 2006. While our revenues have grown rapidly, we have experienced increasing net losses, primarily driven by our increase in marketing expenses. For the period from inception through March 31, 2006, our accumulated deficit was $467.4 million. For 2005 and the three months ended March 31, 2006, our net loss was $261.3 million and $85.2 million, respectively and our marketing expenses were $243.4 million and $88.3 million, respectively.

Sounds just like a .com of yesteryear winner with expenses nearly 2x the revenue.

Re:Sounds like a winner to me...or not

[truthsearch]

Except they have a real business plan.

Re:Sounds like a winner to me...or not

[avdp]

Well, with the revenue growth they're seeing, it's a lot better than the dotcoms of yesteryears. And they are undoubtedly the number 1 player in their fast growing field. Yes, they're spending a lot on marketing, and someday they'll have to pull back a bit on that to transform revenue into profit. Marketing expense is something they can control and reduce at will. I'd be more concerned if their fixed overhead (like maintaining their network, etc) was higher than their revenue.

Most of the docoms that died simply did not have a business plan that could generate a profit. It was the classical 3 step process of 1.create a dotcom 2.??? 3.Profit! - and there simply was no #2 in sight.

(of course it'd be very unwise to make investment decisions based on my personal opinion)

Re:Sounds like a winner to me...or not

[Peyna]

They blame their losses on marketing expenses. They're putting down a lot of money trying to grow their customer base, which is working. Once their customer base grows considerably (especially when it starts to include a lot of people like me who don't even use more than a few hundred minutes a month), it is possible that they will turn a profit. It will take some time. Business customers are probably where they really need to grow the most to be more successful, and I'm not sure how that side of things is working for them.

Re:Reelin' 'Em in I see

[ceejayoz]

VonageIPO.com is on a different web host (abuse address abuse@savvis.net versus spam-police@vonage.com), has the old Vonage logo instead of the one on the Vonage.com site... hmm.

At the very least, it's suspicion inducing. If it's legit, Vonage should put something on their site - currently, a search for "IPO" comes up empty.

Re:I'm pretty certain...

[harryk]

It certainly appears legit, here's the registrar information:

Whois Server Version 1.3

Domain names in the .com and .net domains can now be registered
with many different competing registrars. Go to http://www.internic.net/
for detailed information.

      Domain Name: VONAGEIPO.COM
      Registrar: NETWORK SOLUTIONS, LLC.
      Whois Server: whois.networksolutions.com
      Referral URL: http://www.networksolutions.com/
      Name Server: DNS1-NYC.VONAGE.NET
      Name Server: AUTH00.KEWR0.S.VONAGENETWORKS.NET
      Name Server: AUTH01.KEWR0.S.VONAGENETWORKS.NET
      Status: REGISTRAR-LOCK
      Updated Date: 08-may-2006
      Creation Date: 25-apr-2005
      Expiration Date: 25-apr-2012

Citizenship requirements for Vonage IPO

[sisukapalli1]

I have been a Vonage customer for a while and got the IPO email. However, the requirement seems to be that one needs to be a US citizen (which I am not). I wonder what the reason for this requirement is. I tried calling their number, but that was just a "outsourced" prospectus company. I am willing to risk a few bucks but seems like I may not get a chance.

S

Re:Citizenship requirements for Vonage IPO

[Jerry Rivers]

I'm not sure the citizenship requirement is legal. If we are legal residents of the U.S. we normally have the same rights as anybody else, with very few exceptions (such as voting and jury duty). As long as we are tax-paying, upstanding citizens, it should make NO difference if we are citizens or not in order to purchase shares.

Re:Citizenship requirements for Vonage IPO

[Jerry Rivers]

Lets try this again.

As long as we are tax-paying, upstanding legal residents, it should make NO difference if we are citizens or not in order to purchase shares.

Re:Citizenship requirements for Vonage IPO

[Vandre]

I feel your frustration.... I signed up for vonage on December 20th (Eligibility is limited to people who where customers before December 15th...) ='(.. OUCH.....

ok.. ok... mod me down (goes and hides away...)

Re:Citizenship requirements for Vonage IPO

[Jerry Rivers]

Oh? How so? Please explain.

Re:Vonage is a scam

[FryingDutchman]

You're kidding right? Why don't you take that argument to iTunes who doesn't tell you in addition to the $0.99 a song they charge you have to shell out $40 a month for an ISP, and upwards into four figures for a computer. Couple hundred for an iPod, hell - make 'em pay the $38 a month it costs for the electricity to power your house, which God help them if the mortgage is anything like mine, they'll go broke. Idiot.

If you have cable/private T at houre house right now - it's $40 for that plus $60 a month for your average LEC carrier phone line. $100 total telcom bill. Vonage drops it to $60 a month. If you have DSL you're screwed because you need to phone line (unless you have OneLink or something).

It's not for everyone but it's much cheaper than Verizon's offering of $40 a month for VoIP over their DSL line. And the cable company's similarly priced VoIP offering.

Re:Reelin' 'Em in I see

[Milican]

If you gave them your username and password there is no reason why they would not be able to pass that info on to vonage and relay the info back. Unlikely, but possible.

JOhn

This is old news

[fiver-hoo]

I've known about this for months. In fact, so has slashdot. http://it.slashdot.org/article.pl?sid=06/02/09/001 5221

Re:I'm pretty certain...

[Diashto]

http://rapidshare.de/files/20104039/vonageipoinfo. wav.html

Think this will work.. the wav of the voicemail recieved.

Going "public," you mean

[mnemonic_]

I wonder how many slashdotters know what "IPO" even means.

Re:Going "public," you mean

[Chris Pimlott]

I wonder how many slashdotters know what "IPO" even means.

Just about all the ones that were alive during the first dot-com boom...

Re:Vonage is a scam

[windowpain]

Not only are you a troll, you don't know what you're talking about. Skype does not equal Vonage.

Skype is free only for computer to computer calls.

Skype charges 1.7 Euro cents per minute (about 2 US cents) for calls to real phone numbers. And you have purchase that time in advance in blocks of 10 Euros.

If you want to get a real phone number you have to get SkypeIn, which is 30 Euros per year.

Skype can't be used for 911 at all, while Vonage is working on it and has gotten it together in many locales.

All Skype phones plug in only to a computer, not a cable modem.

Yes, Skype is a bargain and I use SkypeOut myself to call a friend in Australia but Vonage it ain't.

That having been said I think Sunrocket is a better deal. $199 a year, they give you the phone, and you don't have to keep your computer on 24/7. Also, you can hack it so you that you can use your home's existing phone wiring to plug in more phones.

Re:Reelin' 'Em in I see

[Raptor CK]

The voicemail came from within Vonage's own system. Check your voicemail from the web, and it'll point that out.

Granted, it might've made much more sense to have run everything through the vonage.com domain, but anyone who's sending a message from within the system probably has enough access to screw with my account already.

(On top of that, one the front page, they ask you to log in with your IPO site credentials, not your Vonage user account credentials. You don't get to set up a login on vonageipo.com until you tell them your account number and email address. I think you're jumping the gun by just a bit.)

Re:I'm pretty certain...

[XMilkProject]

It's not a scam. Do you live in a vacuum? Every financial show has been talking about this for weeks. The general consensus is that it is probably a good short term buy, but long term regulation and competition will force them out of business.

Re:Reelin' 'Em in I see

[AKAImBatman]

Their SEC filings are here.

A story on it over at VoIP Magazine is here.

Their (not yet active) trading charts can be found here under the symbol "VG".

If this is a fishing scam, it's a pretty darn good one. More likely, Vonage wanted their financial issues to be separate from their marketing site and didn't think about how that would look.

Re:Reelin' 'Em in I see

[karrde]

>whois vonageipo.com

Registrant:
vonage holdings
      23 Main Street
      Holmdel, NJ 07733
      US

      Domain Name: VONAGEIPO.COM

      Administrative Contact, Technical Contact:
            vonage holdings itadmin@vonage.com
            23 Main Street
            Holmdel, NJ 07733
            US
            732-365-2603

      Record expires on 25-Apr-2012.
      Record created on 20-Feb-2006.
      Database last updated on 10-May-2006 10:08:55 EDT.

      Domain servers in listed order:

      DNS1-NYC.VONAGE.NET 216.115.31.140
      AUTH00.KEWR0.S.VONAGENETWORKS.NET 69.59.252.42
      AUTH01.KEWR0.S.VONAGENETWORKS.NET 216.115.30.40

>whois vonage.com

vonage holdings
      23 Main Street
      Holmdel, NJ 07733
      US

      Domain Name: VONAGE.COM

      Administrative Contact, Technical Contact:
            Holdings, Vonage itadmin@vonage.com
            Vonage
            23 Main Street
            Holmdel, NJ 07733
            US
            732-365-2603

      Record expires on 12-Dec-2008.
      Record created on 12-Dec-2000.
      Database last updated on 10-May-2006 10:09:41 EDT.

      Domain servers in listed order:

      DNS1-NYC.VONAGE.NET 216.115.31.140
      AUTH00.KEWR0.S.VONAGENETWORKS.NET 69.59.252.42
      AUTH01.KEWR0.S.VONAGENETWORKS.NET 216.115.30.40

Amazing... Admin contact and DNS servers are the same...

Re:Reelin' 'Em in I see

[orielbean]

Frying, it is legit. They won't post a presale of IPO common stock on thier website because new customer aren't eligible. You had to be a member since 2005. I work for one of the brokerage companies they partnered with to control the shares. It is the real deal.

Obligatory Star Wars Reference...

[pedalman]

"That this is a scam."

Your lack of faith disturbs me.

Re:Obligatory Star Wars Reference...

[TheJediGeek]

The proper quote is, "I find your lack of faith disturbing"

Yes, I'm a geek, read my username

It's legit.

[chipster]

Using that site and providing simply my vonage account no. and my zip code, it auto-populated my address, etc, and now I'm good to go.

It also forces you to use one of three "limited purpose brokerages" - Smith Barney, UBS, or Deutsche Bank Alex.Brown.

Re:It's legit.

[anagama]

How do you get past the roadmap page: "Congratulations, you have succesfully completed Steps 1 - 3. On the next page, you will see the "Main Menu," which will serve as your roadmap throughout the rest of the process.... Below is a site map to help you navigate the Main Menu. Click on the Next button below to Continue."

For the life of me, I can't find a "next" button and go set up a brokerage account.

Re:It's legit.

[Fisher]

I had the same problem.

You have to scroll the far right.

Re:Reelin' 'Em in I see

[orielbean]

In addition, I got my own IPO email in a mailbox behind all sorts of firewalls and spam blockers. vonage is on my whitelist and it got through, like the other legit emails from my banking ,etc. I've also never gotten a single piece of spam or otherwise at this inbox, and I get about 150 emails a day for 2 years now. A very elaborate scam, eh? :-(

Re:Reelin' 'Em in I see

[Slayback]

I'm glad that people are now hesitant due to phishing scams and don't just jump at every thing they get in their email, BUT, this is not one of those times.

You try to register? No, apparently not due to your comments.

All you give them is your account number, billing zip code, and email address associated with the account. None of which is identifiable to you unless they have a direct connection with the Vonage system. As it were, they correctly identified me based on that information alone.

At any rate, it worked for me. Take off the tinfoil hat for just once though and check your facts before speculating wildly.

The IPO offer is real

[truthsearch]

I don't see a reference to the domain, but I did find this press release proving the IPO offering is real:

Vonage To Reserve A Portion Of Common Stock For Customers

Holmdel, NJ, May 8, 2006 - Vonage Holdings Corp. today announced the launch of a Directed Share Program as part of its proposed initial public offering (IPO) of common stock, which will allow eligible customers to purchase shares at the IPO price.

To be eligible to purchase common stock at the IPO price in the Vonage IPO, customers must meet strict eligibility criteria. Vonage customers may be eligible to participate if they meet all of the following criteria:

they opened accounts with Vonage America 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

Customers do not need to continue to be Vonage account holders to participate in the program.

Vonage employees can not answer any questions on this subject.

A registration statement relating to our common stock has been filed with the Securities and Exchange Commission but has not yet become effective. The common stock may not be sold nor offers to buy be accepted prior to the time the registration becomes effective. A copy of the prospectus for the proposed offering may be obtained from:

Cindy Capone
Re: Prospectus Request
23 Main Street
Holmdel, NJ 07733

Re:Reelin' 'Em in I see

[Lxy]

Dig further (literally)....

#dig vonage.com
#dig vonageipo.com

ARIN reports the vonage.com IP being hosted on a /20 owned by Vonage.
ARIN reports the vonageipo.com IP being hosted by Savvis.

If you own a /20, why would you outsource your web hosting? Definitely sounds phishy to me.

Re:Reelin' 'Em in I see

[x2A]

This is NOT how a domain registration lookup (a "whois") works!!!

Why don't you read the post first that you're replying to, and then UNDERSTAND WHAT IT SAYS before typing a response.

Hint: The whois record comes from the domain registrar, not the website you're "logging in" to.

Either it's spam, or it's a scam

[massysett]

So, there are two possibilities here. First, maybe this is a phishing scam. Second, maybe the voicemail is "legitimate," in which case Vonage is using its voicemail system to spam its customers.

Either way the answer is obvious: don't touch the stock.

Re:Either it's spam, or it's a scam

[loyd86]

The whois for the vonageipo site seems to check out, the DNS servers are the same. I could not find a link to the vonageipo.com website on vonage.com though.

Vonage

[certel]

I'm going to open an IPO for my company. Anyone interested? :)

I signed up

[esconsult1]

For people NOT having a vonage account and who never used vonage, this makes no sense, and they should probably be wary of phishing scam.

However, for people like myself using vonage for 2+ years now, it immediately makes sense. I registered and am now waiting for the time when I can buy my shiny new stock certificates.

Considering that the email NEVER went to the people who DO NOT use vonage, well... the aluminum foil is just seeping into your crania right about now and polluting your otherwise smoothly functioning thought process.

Re:Reelin' 'Em in I see

[jessedh]

Before I registered I did this...

                Registrant:
              vonage holdings
              23 Main Street
              Holmdel, NJ 07733
              US

              Domain Name: VONAGEIPO.COM

              Administrative Contact , Technical Contact :
              vonage holdings
              itadmin@vonage.com
              23 Main Street
              Holmdel, NJ 07733
              US
              Phone: 732-365-2603 ...and it is legit

Re:Reelin' 'Em in I see

[ivan256]

Just curious... Let's say somebody got my vonage username and password. Aside from checking my voicemail and canceling my service, what exactly do you think they'd do with it? Phishing scams usually phish for something, you know... Profitable. You can't even get enough personal info out of somebody's Vonage account page to make a reasonable attempt at identity theft.

Go ahead and try to log in. Go ahead - I'll wait. Can't can you?

I hadn't tried it until I saw your post, but I went back and dug up the e-mail figuring I could always change my vonage password afterward... You can indeed log in. I got bored with the forms, so I didn't go through the whole process, but the summary says they don't take any of your financial information, they just do the standard risk tolerance questions that you have before buying any IPO stock and then refer you to an independent brokerage.

If this is a phishing scam, it's run by clinically dumb people.

Hells yeah!

[singingjim]

How often do average blokes such as ourselves get a chance to get a crack at an IPO? Not very often to be sure, if ever. Most IPOs go through large investment houses that require you to be a customer and have more money than God deposited there to qualify for IPO shares. I think this is a good opportunity for us Vonage customers and am signed up and raring to get a hundred shares hopefully. At worst I'm out around $1600, but if Vonage doesn't screw things up, the upside could be the downpayment for a house. I'm in. I'll hopefully be "touching" some Vonage stock at ground floor prices. Eat your hearts out traditional landline losers! =]

Re:Hells yeah!

[Peyna]

I'd take a close look at that prospectus first. The company likely won't be realizing any profits for several years to come, and they flat out admit it. I'd expect it to trade at or around the IPO level for quite awhile. How soon do you plan on buying that house?

Re:Hells yeah!

[singingjim]

I read the prospectus and just like when I gamble I'm not counting on leaving the casino with much in my pocket, but IPOs are funny things and just maybe I'll beat the house a little on this one. If not, nothing ventured, nothing gained.

Re:Reelin' 'Em in I see

[Evro]

I guess your post was tongue-in-cheek, but the domains are registered to the same physical address and the IPO is discussed in their press room on vonage.com.

http://whois.domaintools.com/vonageipo.com
http://whois.domaintools.com/vonage.com
http://www.vonage.com/corporate/press_releases.php ?PR=2006_05_08_0

Hack?

[kybred]

Also, you can hack it so you that you can use your home's existing phone wiring to plug in more phones.

I have Vonage, and have 'hacked' it to use my home's existing wiring.

The 'hack' consisted of disconnected the incoming phone line at the demarc and plugging the Vonage box into a phone jack in my house.

Re:Reelin' 'Em in I see

[f1055man]

Can't they register any admin contact they want? That said, the DNS servers make it seem legit.

Re:Vonage is a scam

[bitingduck]

(parent modded a troll, but I think is just misguided)

Vonage and Skype are similar services with different pricing and marketing models.

Vonage is trying to compete directly with POTS for all calls, and prices on the assumption that you will be making lots of calls to non-Vonage phones. It offers convenience, a single telephone and number to deal with (with some nice options on that), and you don't have to worry about whether you're calling a Vonage or POTS phone-- it just acts like a phone. They don't provide the handset, just the router.

Skype offers similar service, but AFAIK you have to use your computer as the base station (rather than any old phone), and while in-network calls are free, you have to pay by the minute for out-of-network calls. If you want to use it like a regular phone you could very easily end up paying about the same for Skype as for Vonage, they just use a different hook to attract you, and they use some viral marketing to get people to sign up (It's free to call in-network).

Vonage has some nice features that made me pick them over one of the VOIP services offered by the phone company:

-it's no extra charge to US and Canada (and now parts of Europe)- ATT may have been offering that when I signed up for Vonage, but I had to dig around on the website and it wasn't unambiguously stated.

- I can get virtual phone numbers in area codes where I want people to be able to call me with a local call, and for less than the cost of LD service or an additional vonage account, I get two-way unlimited long distance dialing. Combine that with forwarding and it can be very handy and flexible.

Re:Reelin' 'Em in I see

[mmkkbb]

I'm pretty sure he was replying to this:

Also, when you enter your account number it successfully looks up your account information, a phishing scam wouldn't be able to do that.

But you type in all caps, so you must be right.

Re:Reelin' 'Em in I see

[SloWave]

Worked fine with Firefox. Just had one 'next' box that I had to scroll to the right to find.

Re:Reelin' 'Em in I see

[Quince alPillan]

Or, if you call Vonage and ask for information, they point you to the site and the phone number. Pretty nifty that they managed to fool Vonage's own tech support.

Vociemail from "system" confirming legitimacy

[ahkbarr]

If any actual vonage customers replied, they'd have said that on May 9, a voicemail had been sent from "system" (internal to vonage) that confirmed the legitimacy of the announcement.

Could you !!!FRIST P0ST!!! morons be bothered to check on anything in TFA?

From whois:
Registrant:
vonage holdings
      23 Main Street
      Holmdel, NJ 07733
      US

      Domain Name: VONAGEIPO.COM

      Administrative Contact, Technical Contact:
            vonage holdings itadmin@vonage.com
            23 Main Street
            Holmdel, NJ 07733
            US
            732-365-2603

      Record expires on 25-Apr-2012.
      Record created on 20-Feb-2006.
      Database last updated on 10-May-2006 10:53:41 EDT.

      Domain servers in listed order:

      DNS1-NYC.VONAGE.NET 216.115.31.140
      AUTH00.KEWR0.S.VONAGENETWORKS.NET 69.59.252.42
      AUTH01.KEWR0.S.VONAGENETWORKS.NET 216.115.30.40

Re:Reelin' 'Em in I see

[mmkkbb]

There is the possibility that the IPO itself is outsourced to a financial consultant of some sort, I suppose.

Would you buy stock from this man?

[mbook]

From the prospectus:

http://www.sec.gov/Archives/edgar/data/1272830/000 104746906006601/a2169686zs-1a.htm

The past background of our founder, Chairman and Chief Strategist, Jeffrey A. Citron, may adversely affect our ability to enter into business relationships and may have other adverse effects on our business.

Prior to joining Vonage, Mr. Citron was associated with Datek Securities Corporation and Datek Online Holdings Corp., including as an employee of, and consultant for, Datek Securities and, later, as one of the principal executive officers and largest stockholders of Datek Online. Datek Online, which was formed in early 1998 following a reorganization of the Datek business, was a large online brokerage firm. Datek Securities was a registered broker-dealer that engaged in a number of businesses, including proprietary trading and order execution services. During a portion of the time Mr. Citron was associated with Datek Securities, the SEC alleged that Datek Securities, Mr. Citron and other individuals participated in an extensive fraudulent scheme involving improper use of the Nasdaq Stock Market's Small Order Execution System, or SOES. Datek Securities (through its successor iCapital Markets LLC), Mr. Citron and other individuals entered into settlements with the SEC in 2002 and 2003, which resulted in extensive fines, bans from future association with securities brokers or dealers and enjoinments against future violations of certain U.S. securities laws. The NASD previously had imposed disciplinary action against Datek Securities, Mr. Citron and other individuals in connection with alleged violations of the rules and regulations regarding the SOES. These and other matters are discussed under "Information Concerning our Founder, Chairman and Chief Strategist."

There is a risk that some third parties will not do business with us, that some prospective investors will not purchase our securities or that some customers may be wary of signing up for service with us as a result of allegations against Mr. Citron and his past SEC and NASD settlements. We believe that some financial institutions and accounting firms have declined to enter into business relationships with us in the past, at least in part because of these matters. Other institutions and potential business associates may not be able to do business with us because of internal policies that restrict associations with individuals who have entered into SEC and NASD settlements. While we believe that these matters have not had a material impact on our business, they may have a greater impact on us when we become a public company, including by adversely affecting our ability to enter into commercial relationships with third parties that we need to effectively and competitively grow our business. Further, should Mr. Citron in the future be accused of, or be shown to have engaged in, additional improper or illegal activities, the impact of those accusations or the potential penalties from such activities could be exacerbated because of the matters discussed above. If any of these risks were to be realized, there could be a material adverse effect on our business or the market price of our common stock.

Common misconceptions

[artemis67]

I got the offer from Vonage, too, and I'm debating it. I haven't done the research on it yet. However, it's a common misconception that companies that are experiencing explosive growth should be rolling in the cash. Rapid growth is actually quite expensive, because the company is having to dramatically increase its size in order to keep pace.

Secondly, debt is not necessarily a bad thing for businesses; in fact, it's a positive. I won't go into all the details, but suffice to say that it increases the earning power of the money supplied by the shareholders.

Third, debt is a much cheaper form of financing than equity offerings. It's only natural to expect Vonage to use as much debt as is available to them before they launch an IPO. Think of this, also -- with an IPO, the current Vonage stakeholders are giving up a lot of control over their company. So really, the fact that they are conducting an IPO should really raise more questions than the fact that they have a lot of debt.

phishing? i think not

[tscheez]

The vonageipo.com address is owned by vonage. That is easy to find out. However, the reason it is not on the vonage.com site could be some SEC regulation about advertising an IPO and having it separate from the main company website. I'm not sure about this, mainly because I am not a stock guy, but I could see this being an issue.

Re:phishing? i think not

[headroll]

Tried logging in with 'bad' credential (i.e. wrong zip, or email, or acct number) and was not allowed in. Tried loggin in with 'good' credentials and was allowed in.

So, unless they managed to get this information from Vonage and are using it against us, it seems legit.

-Roll

Re:Reelin' 'Em in I see

[azuretek]

They do not require you to enter your password, they just require your account number, name and zip code. It will tell you if you are eligible and give you your name, a phising scam couldn't figure out your name this way.

How could anyone call this a phishing scam? Not only that but what does someone have to gain from accessing your vonage account? They get to see who you've called? You can't add services or lines without entering some personal information that the phisher wouldn't be privileged to.

Re:I'm pretty certain...

[iambarry]

I emailed support@vonage.com yesterday, and they confirmed that vonageipo.com is their site;this is not a scam.

However, they should never have sent out email with a link to a site other than their own.

-There's no way to verify through whois records that the site is legit
-Best you could do is if the whois has a DNS server listed on vonage.com's domain
-Their dns servers are not authoritative for the domain
-It would not be hard to net scan for vonage SIP phone adaptors, then connect to them to leave voicemail faking out the CID to look as if it where from "system"

In today's world of phishing scams, shame on Vonage for not being vigilant. This just encourages users to fall for phishing ploys.

Aside from the debt...

[StringBlade]

The Prospectus and Risk Factors have some interesting tidbits:

1. Their CEO (and top officers) have 6 digit salaries with bonuses that are larger than the actual salary

2. In order to succeed (in their words) Vonage will need consumers to move away from traditional phone lines in favor of Vonage. [Without E911, this is be VERY difficult indeed - and the telcos are not likely to willingly give up their business by giving Vonage access to their E911 systems...even if the FCC says they have to.]

3. In order to succeed (in their words) Vonage needs their competitors to *not* come up with products as good as or better than Vonage's own product. [While this seems intuitive, just think how long it will be - if digital phone takes off (#2 above) - before the cable companies offer equivalent or better offerings with guaranteed QoS for their digital phone service]

I also am not going to take this offer for two reasons:

1. I have to buy at least $100 shares which is more than I can afford at the moment, and
2. I think the price will go down after the first day or two.

Re:Aside from the debt...

[Software]

Re point 1, in the New York City metro area (where Vonage is), a six figure salary for ordinary technical managers is quite common. Of course, the six figure range is pretty large...

Re point 2, yes, the landline phone market is pretty saturated, so they'll have to take customers from RBOCs. No news there.

Point 3 is rather obvious.

I didn't RTFA, so I'm not sure if the shares cost $100 each or if you have to buy at least $100 worth of shares, but if it's the latter, you should know that $100 is nothing in the stock market. You're going to pay about $20 to a broker to sell the shares, so there's no point unless you're going to put in a couple grand (IMHO).

Re:Aside from the debt...

[initsix]

I think AC#1 is incorrect. I read the details last night and you have to purchase a minimum of 100 shares at a projected IPO price of ~$16. So we are talking about ~$1600 on a potentially risky investment.

Re:Aside from the debt...

[pimpkracker69]

You're going to pay about $20 to a broker to sell the shares, so there's no point unless you're going to put in a couple grand (IMHO).

Point well taken---trading surcharges can make small investments impractical---however, as an investor of extremely modest means I've used ScotTrade. $7 trades is perhaps the biggest selling point for me. Prior to learning about ScotTrade I had always assumed that it would be cost prohibitive for an independent investor with only a couple grand (or less!) to get involved with the stock market.

Impossible though it may seem, I've found analysis on Slashdot to be quite useful in making decisions about where to invest. The frequency that a certain company appears in slasdot headlines is one bellweather. Thoughtful analysis by slashdotters is also useful.

Re:Aside from the debt...

[unity]

"Impossible though it may seem, I've found analysis on Slashdot to be quite useful in making decisions about where to invest. The frequency that a certain company appears in slasdot headlines is one bellweather. Thoughtful analysis by slashdotters is also useful. "

Very true, that makes two of us that use slashdot to help do DD on our investment portfolio. I've been doing that for years, and has helped me make a wad of cash.

Re:Aside from the debt...

[suitepotato]

3. In order to succeed (in their words) Vonage needs their competitors to *not* come up with products as good as or better than Vonage's own product. [While this seems intuitive, just think how long it will be - if digital phone takes off (#2 above) - before the cable companies offer equivalent or better offerings with guaranteed QoS for their digital phone service]

Not happening for VoIP, especially because people insist on putting dial-up modems to it for credit card machines, atm machines, and dial-up internet (yeah, dial-up on a voip line coming across a 384K frac T1 WITH an eth if for chrissakes). This is digital --> analog tones --> lossy digitization --> packet loss and latency --> lossy reconstruction to analog --> lossy analog systems --> analog receiver at far end --> conversion back to digital info. The VoIP part is tcp/udp/other over ip over docsis/frame/atm over t1/sdsl/idsl/adsl/cable to the other side of the first mile and then whatever over whatever until the end of the data side.

For existing HFC telephony, you're not likely to get better than 33.6 on a dial-up but it will be stable and the voice clear. I've been a cable telephone customer for years and couldn't be happier unless the cost came down, but it is still less than SNET/SBC/ATT/whoever-they-are-next-week.

Re:Aside from the debt...

[dimension6]

Add me to the list....athough I am just starting to actually invest, I have been researching/following the markets for awhile (though I focus on Japanese ADRs). I've been using TradeKing for a few months (created by the founder and former president of SureTrade), and it rocks. It provides an excellent trading base for younger tech-savvy people and charges $4.95 a trade. I also signed up and adding my checking account without having to mail anything in. As homogenous as Slashdot is, there are many differing (and every now and then insightful) opinions that can change my thinking about a company or industry...

Re:Aside from the debt...

[carpeweb]

Re: E911

I think this may be more perception than reality. I've had 911 service with Vonage since I signed up two years ago.

True, you have to "register" for it and wait for the system to confirm your address.

I suppose that's a barrier for some consumers, but I think the bigger barrier is the scare tactics used by the telco dinosaurs who make it sound like you'll be murdered in your home because you decided to use Vonage. (I know, I think this actually happened somewhere, though I don't know if it was Vonage, but the customer didn't have 911 and was murdered.)

But, it's simply not true that you can't get 911 service with VOIP.

Re:Aside from the debt...

[StringBlade]

I screwed up typing...I have to buy 100 shares (at $20 per share estimated) which is too much money for me - not $100.

And I did not RTFA, I'm speaking from the email Vonage sent me as a customer who's been with them since January last year.

Re:Aside from the debt...

[StringBlade]

There's a difference between Vonage 911 service and E911. With Vonage it's voluntary and while you must register your home address, they have no way of knowing where you're really calling from (since you can take the phone adapter with you when you travel). Hence, you must tell the Vonage 911 service where you are when you're calling. With Enhanced 911 (E911) the call center knows exactly where the call originates from and can send police/fire/medic even if you can't speak. That's a big difference that many people are simply not willing to cope with yet. I do simply because we have two cell phones with E911 and we keep them charged with good signal practically everywhere in our house.

Re:Reelin' 'Em in I see

[GuanoTO]

http://www.vonage.com/corporate/press_releases.php ?PR=2006_05_08_0 They are going IPO and they are reserving stock for customers. www.vonageipo.com may not be legit, but there is, in fact, mention of it on their site.

Re:Vonage is a scam

[ghoul]

Okay too many people here who have wasted money on Vonage and dont want to admit they have been made fools of. As for all the features 3 way calling , caller ID blah blah blah you get those with any decent cell phone provider. Me ? I personally dont have a landline and havnt had one for years. I do have Time Warner Broadband and combined with my T-Mobile family plan I find I have no need for a landline. For 60 dollar a month I get 500 minutes on the plan. Same rates for USA and Canada . Also ulimited nights and weekends. I have had morons tell me 500 minutes is not enough. Now unless you are unemployed or a telemarketer I couldnt imagine spending more than 500 minutes on the phone during daytime(nights and weekends are free remember) Who has the time??? Another set of people tell me I should have a landline so I can call 911 . My cell phone already provides e911 and even if it didnt Vonage is no better. So why the heck would I need Vonage. The only thing I dont get on my cell phone is affordable international service and for that Skype is way way cheaper than Vonage.
Vonage is a fad. Wont be around in 2 years.

Buy or don't buy?

[bobbutts]

If you think Vonage is going to be a big player long term in VOIP.. BUY
If you think Vonage is going to get buried by ATT, Skype, Verizon, Sprint, etc.. Don't buy
I'm thinking Vonage is not going to live up to expectations since you can now get similar things from the companies people know.

Also the POTS companies are waking up a little bit. My in-laws are FINALLY dropping dial up because Sprint is offering them unlimited domestic POTS and ADSL for $70 a month. About the same price as cable broadband + Vonage. Bottom line is that Vonage's previous competitive advnatage (Price) is less of a factor or no factor. And their service is inferior to POTS IMO.

Note. I'm a former Vonage subscriber now using a combination of cellular and Skype for voice. In my case the price of Vonage was too high and the service redundant YMMV

Re:Vonage is a scam

[ghoul]

In Answer to your question:-The same kind of idiot who is the target market for Vonage i.e. Those who want to use a real phone instead of a headset plugged into a computer. Vonage is targetting the grandmas and grandpas and most of them dont even know what broadband is. It is definitely deceptive marketing. BTW I hope you have heard of cordless headsets and handsets for voip phones. Samsung even has a cellphone which can be used in dual mode for gsm/voip so you dont need a headset to use free VOIP

Re:Reelin' 'Em in I see

[propagandize]

I did log in, and didn't have any problems (though it won't let you get all the way through with FireFox. If you put in your account number (a little risk I admit, if you don't trust it), they bring up your name (unsupplied by you). So, were it a scam, they already have the database info.

Re:Missing steps 4-7 - only works with IE

[propagandize]

I went through with FireFox and had the same problem. Then I fired up IE and saw there was a "next" button that hadn't appeared before. The browser requirements were listed on one of the first pages, but I pretty much ignored them until I had a problem.

Re:Vonage is a scam

[ghoul]

Most households also have cellphones and most of the services you mentioned are provided by cellphones anywyay or by a decent answeriing machine. The cheaper long distance calls are not competitive against nationwide cell plans anyway and for international calls SKYPE is way cheaper

vonage "spamming" using voicemails

[devilsbrigade]

I am a vonage employee. I can't discuss the IPO beyond whats been published (and to be honest I don't really know all that much more). However, the use of the Voicemail is not uncommon to send messages out. One of the towns in my area actually uses a voicemail/autodialer to let people know about problems, such as when a water main pipe burst etc. we use the voicemail and email, to insure that customer get the information. To many customer have filters on emails, don't get important information, and then complain. An extra voicemail? cry me a river. Did you get your ipo information? yes.

Re:vonage "spamming" using voicemails

[KUHurdler]

Yes, I got the voicemail loud and clear. Here's what I heard:

"We don't care about your time, or our business relationship with you. We will quickly spam you to eternity if we think it make us a quick buck."

My response will probably be a quiet one: If you do it again, I'm gone.

Re:vonage "spamming" using voicemails

[michaelhood]

It would be wise of Vonage to take a page out of the book about how other popular companies handle their employees' internet presences. "Censorship" may not be of popular opinion on Slashdot, but when you make a post like the parent I'm replying to, you are effectively speaking on behalf of Vonage. Perhaps not legally, but when customers current or prospective are voting with their wallets, it'll count. I read and appreciated your presence all the way up until "cry me a river". As a prospective (thanks to their effective marketing) shareholder: Especially in the process of trying to market an IPO, I would expect them to terminate your employment. Any IPO's success largely depends on Wall Street's "buy-in" of a company. And that is sheer marketing. The financials don't matter nearly as much as the analysts' arrogant opinions of how a stock will perform, thus fueling its IPO purchasing. Guess what: a lot of VCs, Wall Street firms, and more read Slashdot. Your negative attitude towards customers will be the only "peek" into the employee and customer service culture at Vonage that most of the readers get. It's obvious that you're a wage earner with nothing riding on this IPO or you'd have never commented in the first place, much less the way you did. But please, if you expect to keep your job, keep your mouth shut.

Re:vonage "spamming" using voicemails

[devilsbrigade]

In retrospect the "cry me a river" comment was over the top. Wage earner with not riding on the IPO? Work in customer care? no. Does that excuse me comment...not really. But, yeah...i got enough riding on this IPO that i want it to go successfully, and enough loyalty to my company to make ill addvised defenses of its practices.

Re:Vonage is a scam

[ghoul]

I agree both of them are similar. However I basically think the having to pay for phone service thing belongs in the same era as B and W TV and VCRs. In Austin almost everywhere I go I am able to pick up free wifi. Samsung has already released cell phones which can switch from GSM to WIFI on the fly when they find a network. A lot of cities are planning to roll out public WIFI so when I can use voip wireless from a cellphone for free (only cost is buying the handset) why should I pay for phone service? In the transition period while this rolls out and becomes commonplace I want use a service which is free most of the time and has no user lock in and Skype meets that criteria much better than Vonage.

Re:Vonage is a scam

[ghoul]

Itunes is marketed to a net savvy target market. Vonage is marketed to the grandmas and grandpas who are more likely to be misled. Also I dont need broadband service to listen to Itunes music just to download and I can do that at a hundred different places(office library coffeeshop public wifi) besides my home. I am not a fan of landlines ; in fact I do very well with just my cellphone and Time Warner. So having ditched landlines going back to something like Vonage looks like a backward step. Now if Vonage was to provide VOIP over public WIFI and sell us the dual mode (GSM/VOIP) handsets at loss leader costs I would be willing to do business with them but pay for a landline??? You must be crazy :)

Re: Vonage is a scam?? No...

[johnlcallaway]

Why have Vonage?? I have had it for 3 years and will never give it up.

• Free call from anywhere in the world to home/Vonage phones if you can get Internet access, for $6/month (softphone). 500 minutes anywhere else. I used this in Inda for a month, big savings. I also use it when I travel, there are still occasional places where I am charged roaming fees and I hate the surprise when I get my bill, even if I do charge it back to my company.
• Local phone numbers so your mother/father/daughter/son/etc can call without having a long distance charge. Or 800 numbers.
• For that matter, several phone numbers for one phone.
• Fax service. Some people, notably real estate agents and lawyers, still need fax because they need real signatures, not electronic ones.
• Several phones in the house. I have 4 phones, one in the living room, one in the kitchen, one in my bedroom, and one out by the pool. I don't have to carry my cell phone everywhere, especially around the pool. I don't mind accidentally dropping a $20 cordless in the pool as much as my cell.
• Kids ... a ladyfriend's daughter spends thousands of minutes a month talking to her friends in another state.
• Bad cell phone coverage at home

It's not for everyone, but for those that need certain features, it's a lot more economical, convienent, and easy to use than anything else. If I was single with parents that had money and decent cell phone coverage at home and never traveled, I wouldn't have it either. But for $30/month, it is saving me more money than it is costing me. A 60 min. call from India to home paid for my Vonage for 3 months.

Re:Reelin' 'Em in I see

[Milican]

My mistake. I replied to the wrong comment. Sorry for the confusion.

JOhn

Customer appreciation or quick cash??

[ossie]

Some other folks question their motives as well:

http://www.fool.com/News/mft/2006/mft06050832.htm? ref=foolwatch

Second thoughts...

[Zaphod2016]

I was initially pretty excited about this. In fact, I even posted in favor of Vonage above. However, ever actually *reading* the prospectus, this clearly ain't no GOOG. Yikes. Many a thanks to my fellow /.'s for forcing me to really think this one out.

I'm not saying I *won't* but the stock, mind you, only that it deserves more thought than IPO is teh w00t!! (guilty).

Of course, this entire ordeal had made me reconsider those commercials: "people do stupid things...woo woo, woo woo woo!"

(Excuse a two-faced bastard, but my sn *is* Zaphod after all.)

Re:Second thoughts...

[The Wicked Priest]

I'd still invest (if I could) -- because I'd count on other people being excited and not reading the prospectus.

Certain Customers

[Nom du Keyboard]

certain customers may be eligible to purchase common stock at IPO pricing.

They should have only left those messages on those Certain Customer's voicemails. Otherwise I'll wonder just how well this company is being run, and do I want to give them my money.

Re:Reelin' 'Em in I see

[x2A]

Then I apologise for the harshness of my post, it was in response to several people's posts, unfortunately it got attached to yours, slashdot seems to breed frustration *lol*

Personal experience with vonage.

[gurps_npc]

I have to say, I am not sure I would WANT to invest in vonage. I use their service and had the following problems:

1) After four months they totally FAILED to transfer over my old phone number. (Note, the fact that they prominently advertised this ability was why I choose them over skype.)

2) Part of the problem was that their email system did not work correctly. I never recieved emails informing me that a problem existed, which caused their system to automatically close the attempt, so I had to restart it up again. A manager told me that the email they send when there is a problem is different from their standard email system and they had several problems with it. Note, I DID receive other communication from them, (including my bill), so it is not like yahoo was declaring vonage email as spam.

3) Despite the fact that this happened repeately, they never CALLED me. At one point, they were the ONLY people in the entire world that knew my phone number, but because of company policy (the STUPIDEST reason I ever heard for screwing you customers) they only communicated by email, never called the clients - even when they KNEW their email system did not work.

The phone service they give works, but the company itself is all screwed up. They need a massive shake-up.

The Risk No One Is Talking About

[carpeweb]

The prospectus should be enough to convince all but the most adamant conspiracy theorists that this isn't a hoax.

As for "scam", well, has it occurred to no one else that some scams are "legal"?

Everyone's talking about the financials, the financials, the financials.

What about the people, the people, the people? Specifically: Jeffrey A. Citron, Vonage's founder, chairman and chief strategist seems to have been a very naughty boy in a previous life.

( INFORMATION CONCERNING OUR FOUNDER, CHAIRMAN AND CHIEF STRATEGIST ) Hopefully, this bookmark will take you to the exact point in the lengthy document (just about all of which is "fine print") that details a younger Jeffrey's pattern of behavior.

I'll excerpt here:

"During a portion of the time that Mr. Citron was associated with Datek Securities, the SEC alleged that Datek Securities, Mr. Maschler, Mr. Citron and certain other individuals participated in an extensive fraudulent scheme involving improper use of the Nasdaq Stock Market's Small Order Execution System, or SOES."

"The SEC alleged that Mr. Citron and the other defendants accessed the SOES system to execute millions of unlawful proprietary trades, generating tens of millions of dollars in illegal profits."

"To settle the charges, Mr. Maschler, Mr. Citron and the other individuals paid $70 million in civil penalties and disgorgements of profits, of which Mr. Citron paid $22.5 million in civil penalties. These fines were among the largest fines ever collected by the SEC against individuals."

But, maybe there's not too much risk going forward, because:

"In addition, Mr. Citron was enjoined from future violations of certain provisions of the U.S. securities laws, including the antifraud provisions set forth in Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 promulgated under the Exchange Act."

So, that means that he promised never to do it again, and we can take that to the bank, right?

Enron was all legal ... until it wasn't.

I'm a very satisfied Vonage customer and would probably have chosen to invest, until I saw this information. Would you invest in Kenneth Lay's next venture?

I'm not sure yet what this means to me as a customer. At the very least, I'll be researching my exit strategy and appreciate the various references to Skype and other alternatives.

NO TOUCH!

[955301]

What's more, the company is ripe for a pump & dump. He has an immense interest in going public, getting the stock value up in the air, then selling out. Hell, he actually had a profit holding company named Treasure Solutions in Florida and an offshore trust.

Again, from the SEC filing,
"Jeffrey A. Citron, our principal stockholder, founder, Chairman and Chief Strategist, will own 48,427,617 shares of common stock, or 31% of our common stock."

More detail about the fraud he conducted.

Pay careful attention to the following quote. The guy is into illegal profiteering:

("NASD") rules restricted use of the SOES system to small retail customer orders and prohibited broker dealers from using SOES to trade for their own accounts. By fraudulent means, defendants Sheldon Maschler, Citron, McCarty, Erik Maschler, and Heartland used the SOES system to execute millions of proprietary trades, resulting in tens of millions of dollars in illegal profits. The great majority of these profits were paid to Sheldon Maschler and Citron, but other defendants profited as well. The fraudulent scheme was carefully planned and orchestrated, and was concealed from regulators through the use of sophisticated software, the creation of nominee accounts and fictitious books and records, and the filing of false reports with the Commission. Defendants Sheldon Maschler, Citron, McCarty, and Erik Maschler carried out the fraudulent scheme from 1993 to March 1998 while in control of Datek Securities. Defendants Sheldon Maschler, McCarty, and Erik Maschler carried out the scheme from April 1998 through June 2001 while in control of Heartland, which had purchased Datek Securities' day-trading business on March 30, 1998. Defendant Raft Investments, Inc. ("Raft") aided and abetted the SOES fraudulent scheme.

Re:Reelin' 'Em in I see

[x2A]

"But you type in all caps, so you must be right"

You have a cause there, and an effect, but unfortunately you've got the two mixed up, which is a classic sign of low serotonin levels, you might wanna check up on that. And of cause I could just respond with something like "but you pointed out that I typed ~10% of my words in caps, so you must be right", but I think when you address the format of a response rather than the response itself, credability becomes hard to retain. (Yes I am aware of mine slipping quickly away too, I just fancied a quick head-up-my-arse response, get it out of my system, I'll be back to normal again after, as long as no one says anything stupider).

As much as you say what the reply was to, the message that was replied to had /before/ that: the domain registration matches up ... which means it is shown that there is no seperate "they" to intercept login details to begin with. Leaving aside that it's not run by man eating elephants, going to the website could mean you get eaten up by man eating elephants!!!

Okay I'll stop now.

(and yes I have apologised to him for the harshness of my response)

Re:Vonage is a scam

[Snwbeast]

Congratulations that only 500 daytime minutes is enough for you. I spent 25 hours in 3 days last week on conference calls with clients troubleshooting problems. And that was just in one week. Thankfully I have Vonage and a nice speakerphone on my desk in my home office, I can just imagine trying to do all that with my cell phone (which has a horrible speakerphone, not very good reception, and would have required me plugging the phone in to charge). While YOU may be satisfied with a cell-only plan it would hardly work for me.

As for being "made a fool of", in what way? Vonage provides a service that has been rock-solid for me for two years in exchange for a MUCH lower rate than my local Telco would charge me. So why exactly am I a fool?

Disappointed in /.ers

[neuroking]

Seriously people what is it? Are you bitter all your precious Linux stocks tanked? Is Vonage not 'enough' of an underdog, like Apple, Linux, etc etc.? Bitter you don't qualify? There's a company that's asking for public investment to duke it out with the big telcos and you whine about it?!?! How long have I sat here and watched article after article on unfair telco practices, telcos unfairly edging out startups, telcos blocking VOIP/bittorrent/etc, telcos remerging into behemouth companies that can shift political influence in their favor on a whim. And now the moment of 'put up or shut up' and you all wimper about it being a tough battle. Go ahead. Search Slashdot for 'telcos'. I swear... I am now totally disappointed in /. Not to mention that the first hundred posts from technologically advanced community are about it being a scam without a bloody whois...

And they have already said the CEO is stepping down as a condition of the IPO, so no sketch at the top (at least no more than other companies).

Re:Disappointed in /.ers

[StringBlade]

I am a Vonage customer and I like the phone service (not the customer service), but that does not mean I think buying into the IPO is a good idea. Reading the prospectus (and from what others have said already) Vonage is not making money and never has. It's losing millions of dollars each year with projections of losing more money.

I simply don't have > $1,600 to throw down the drain in an attempt to keep my digital phone. If they go out of business I will simply move to the next digital phone provider with the lowest price / value per features I want. I'm no fan of telcos, but Vonage has a uphill battle and their prospectus does not look good to boot.

Those who said it's a scam simply didn't do the proper research and certainly aren't customers who were seriously interested.

Probably a good buy.

[Inoshiro]

Apparently they're charging roughly 35 to 40$ USD a month, and 40$ CDN a month for their "North America Unlimited" plans.

Currently, VOIP outgoing providers sell time for about a cent per minute in North America, or as high as 1.5-2.0 cents for an incoming number. My roomate and I have a 1-888# which comes in to the house for a few cents a minute, with outgoing numbers going through 3 different VOIP providers of varying cost (cheapest first, of course). I think it costs us a grand total of 8$/month-2 months depending on usage.

Basically, Vonage is making so much money because traditional POTS is a cash cow, and VOIP makes it ridiculously cheap since you don't even need to run fibre -- BYOC!

Re:Probably a good buy.

[Peyna]

$24.99 for "Unlimited local and long distance calls anywhere in the US, Canada, Puerto Rico and select European countries."

I'm guessing the rate you give includes unlimited to Mexico?

Re:Reelin' 'Em in I see

[ceejayoz]

Regardless, they should really have some way of verifying that it's legit. A link to a press release on Vonage.com would be simple.

Read the prospectus

[podperson]

I use Vonage and I like their service a lot -- so I decided to register for the IPO. You might like to read their prospectus -- it has things in it that you don't often see in prospectuses (i?) of companies going public such as:

"On March 1, 2004, we dismissed Amper, Politziner & Mattia P.C., as our independent registered public accounting firm previously engaged as the principal accountant to audit our financial statements. We re-engaged Amper, Politziner & Mattia P.C. on June 30, 2004, and dismissed the firm again on April 21, 2005. Amper, Politziner & Mattia P.C.'s report on our financial statements for the year ended December 31, 2003 did not contain any adverse opinion or disclaimer of opinion and was not otherwise qualified or modified as to uncertainty, audit scope or accounting principles."

I.e. they've fired and rehired their original auditors several times.

And:

"During a portion of the time that Mr. Citron (Founder, Chairman, and Chief Strategist of Vonage) was associated with Datek Securities, the SEC alleged that Datek Securities, Mr. Maschler, Mr. Citron and certain other individuals participated in an extensive fraudulent scheme involving improper use of the Nasdaq Stock Market's Small Order Execution System, or SOES."

Yup, their top guy has been involved in securities fraud (or at least accused of it). And consider just how egregious this kind of thing has to be to actually result in someone getting in actual trouble. Note that Mr. Citron was only 18 at the time and may have naively been sucked into malpractice by his associates, but still... not something you often see in a prospectus.

And then there's:

"Assumed initial public offering price per share...$17.00
Net tangible book value per share as of March 31, 2006...$(319.30)"

The total offering is for something like 30,000,000 shares, or roughly 20% of the company. So they're expecting punters to shell out $500,000,000 for 20% of a company losing money hand over fist which has 1.6 million customers.

If you compare it to Verizon (market cap $95B) that's very cheap *per customer* and absolutely lousy in every other respect. The question is, will Vonage be able to gain customers and become profitable faster than existing telcos are able to transition to VoIP.

It seems like the assumption is that there's money to be made in being "a phone company" and that all Vonage has to do is get enough customers and then one day it will be able to start gouging them enough to make a profit. Seems like a losing bet to me, so the only other question is whether greedy investors will buy up your (fundamentally) worthless Vonage stock after the IPO?

I'd suggest that there's money in providing data transmission, and that all the things you do with the data at each end (e.g. serve it, receive it (e.g. in a browser or phone), send it (e.g. from a camera or phone) will turn into or already are low margin interoperable commodities (e.g. like cameras, browsers, web servers, and phones). The artificially inflated profits afforded certain monopolies will, at best, be temporary, and I just don't see Vonage turning profits in time to pay off, especially since they don't own any key infrastructure (cell phone towers...). Meanwhile, I will continue to use my Vonage service, subsidized by credulous investors.

Eligibility for Shares at IPO Price

[BrianWCarver]

From this recent SEC filing by Vonage it looks like to be eligible to get shares at the IPO price it needs to be true that (among other things--this is not legal or financial advice, etc):

The customer opened an account directly with Vonage America on or prior to December 15, 2005. The customer must have opened an account with Vonage America and not through a third-party wholesaler.

The customer maintained the Vonage account in good standing through February 1, 2006.

So, running out and signing up for a Vonage account doesn't look like a way to get in on the IPO. That seems like a dumb idea. How many people would sign a 1-yr or 2-yr contract just to have a shot at getting shares at the IPO price. Seems like bad business to me (but possibly necessitated by all the SEC rules...)

Investing Question

[rock_climbing_guy]

Having read over this, I want to learn more about exactly what's going on. I agree that it looks a bit like 1999 all over again. However, I only recently began following business and investing (small) money.

I think this looks like a potential short opportunity, but it would be nice to be able to use derivatives to cover my ass. As you were probably reminded when you signed up for a brokerage account, there is the potential for unlimited loss with any short sale.

What determines when derivatives become available, if they become available at all?

An interesting thought...

[GWBasic]

By law, public corporations must do what is in the best interests of their stockholders. By having a significant amount of their shareholders be their customers, and a significant number of their customers be their shareholders, it gives them an interesting position to work from. Specifically, I choose Vonage because it's cheap. Instead of raising their rates, they allow me to be a part owner of their system. This is good for me as a stockholder because I get a tangible "perk" of a cheap phone. As a customer, this is good because, by law, the company has to work for the best interests of the stockholder, who also happens to be me.

Perhaps blurring the lines between stockholder and customer is their intention? If so, I hope it works out well.

Re:Vonage is a scam

[ghoul]

OK The made fool off comment was kind of out of line but I got a little pissed when my original comment got modded Troll. Now I did mention that if your work is phone related (I said telemarketer but I guess it will cover support and other phone based work) a cell phone is not enough. But for the vast majority of people working out of conventional offices you dont use your cellphone at work. Mostly people (by people I mean Slashdot readers ergo techies) work at a desk and have office phones, email or IM for work communication. So if you are spending a lot of time on the cell during the day your boss might have a problem with that. IT support people who have to actually move around for hardware installation might be an exception but in that case they generally have office provided cellphones. So for all practical purposes for the average techie a cell phone is good enough.

Re:Vonage is a scam

[bitingduck]

Paying for phone service won't disappear for a while. Eventually you'll just pay for a data connection and send what you want over it, but that's a few years out.

Austin is pretty small. There are still plenty of places in LA where you won't get free WiFi, and the phones that switch from GSM to WiFi on the fly probably need a couple generations before they behave well.

In the meantime, there are actually people who can't use a cell phone at home. Wasn't it only about a year ago that a cell company exec publicly opined that customers were pretty unreasonable in expecting their cell phones to work *in buildings*.

I live in a hole in the ground (actually an arroyo), and despite being a densely populated area, there's no cell service in the house or yard. It sometimes works up at the street. Sometimes. When the GSM/VOIP phone is working well I'll probably get one. There are also plenty of people who don't have high speed net access at home, or who travel to places where it's not very available and cell coverage is bad, or aren't served well by mobile phones for any number of reasons. Landlines still work very well, and if you interact frequently with people who depend on POTS (which I do), Vonage is a lot less hassle than Skype-- you don't impose any requirement on the other party if you use Vonage, where you do with Skype (or you pay for Skypeout/in). I can also just plug any old handset into my VOIP router and it works. Until the GSM/VOIP phones show themselves to be reliable and inexpensive I have a wireless phone in the house so I can wander around and talk on the phone without being tied to the computer or having to cobble something together.

Re:I'm pretty certain...

[Lord Flipper]

I just noticed they are also offering free calls to a few European nations to their unlimited users. I'm only on the 14.99 400min plan so I'm not sure if that applies to me as well.

No, that free calls to Ireland, the UK, Spain, Italy, and France deal is for the unlimited accounts [$24.95/mon +tax?].

Not a bad deal, really. You can also get a localised 'virtual' number in some of those countries for the same $4.99/month as the North American numbers go for.

The free calls to the 5 countries does not include calls to European cellular phones, though.

Re:Vonage is a scam

[bitingduck]

I can easily spend much more than 500 minutes a month to Canada and am neither a telemarketer nor unemployed. Put on a headset and talk while you're doing other things. And given the time zone differences can't always do nights and weekends.

I can see from your other related posts that you've got a pretty limited view of requirements people might have for phones, but for some situations Vonage is more useful than a cell or Skype.

I suspect that in the long run Vonage (and possibly Skype as well) will either disappear or morph considerably, but for now it fills a niche pretty well.

Re:Vonage is a scam

[joelleo]

vonage allows me unlimited calls free within the us, canada, uk and several other european nations at any time, day or night, for $25 a month using a regular handset. Compare that with long distance and international charges on your cell to a non-network phone, and tell me whether or not that is > $0. If it is, Vonage is cheaper.

Incidentally, I took my vonage router with me to Indonesia a few months ago. When I had > 30kb/s upstream it was spectacular - using the same phone number, for the same $$ as if I were sitting where I am right now. NO cell company will do that. Unfortunately, the 500kb/s dsl wasn't up to snuff during Jakarta business hours - 64kb/s upstream was its rating and I was lucky if I got 5kb/s up AND down during business hours :)

Also incidentally, there isn't any Vonage capable hardware for easy purchase over there. I found this out the hard way after plugging in at a hotel business office:

Office Admin: Sure, sir, feel free to plug right in
Me: Uh, this IS 110v right?
Office Admin: Sure, sir, it most definitely is!
Me: /me looks at the 3 prong radial plug suspiciously
Me: You are absolutely SURE this is 110v?
Office Admin: Sure, sir, it most definitely is 110 volts!
Me: Uh, ok. Its on your tab if it blows *grin*

Plug it in. Admire puff of smoke that simultaneously expands from both the ac adapter and the router itself.

Me: Uh, can I talk to the hotel manager on duty?

I contacted every retailer I could contact. I even phoned some of the distributors of network gear. NOONE had Vonage capable equipment in Indonesia or Singapore.

To be fair, the hotel agreed to reimburse me for the purchase of a new router and comp'd me connectivity and long distance for the short duration of my stay. They also allowed me to use their shipping account, then hand-delivered the router to my house in Jakarta in the middle of the night. Most definitely, the hotel's service was spectacular in rectifying an honest mistake on their part.