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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."
To raise money for the new "SO you want to actually GET THROUGH to customers on our cablemodems" tariff which is upcoming.
I'm a fiscal conservative, it's a pity we don't have a political party anymore
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.
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.
Four weeks, Twenty papers, that's two dollars
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.
So long, and thanks for all the Phish
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.
Javascript + Nintendo DSi = DSiCade
>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...
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.
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.
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.
...and that's the way the cookie crumbles.