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Vonage going IPO 221

Posted by Hemos
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."
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Vonage going IPO More

Vonage going IPO

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  • they need to. (Score:4, Insightful)

    by Churla ( 936633 ) on Wednesday May 10, 2006 @09:29AM (#15300389)
    To raise money for the new "SO you want to actually GET THROUGH to customers on our cablemodems" tariff which is upcoming.
    • 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
    • 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.

  • I just received email... (Score:3, Funny)

    by Ingolfke ( 515826 ) on Wednesday May 10, 2006 @09:30AM (#15300399) Journal
    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 received... (Score:2, Insightful)

    by BarC0d3z ( 825670 )
    ... 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.

  • Sounds great ... but. (Score:5, Informative)

    by grunherz ( 447840 ) on Wednesday May 10, 2006 @09:38AM (#15300447)
    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. (Score:5, Insightful)

      by imadork ( 226897 ) on Wednesday May 10, 2006 @09:55AM (#15300580) Homepage
      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....

      • Common misconceptions (Score:5, Interesting)

        by artemis67 ( 93453 ) on Wednesday May 10, 2006 @11:11AM (#15301118)
        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.

        • Aside from the debt... (Score:5, Insightful)

          by StringBlade ( 557322 ) on Wednesday May 10, 2006 @11:27AM (#15301241) Journal
          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 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

            • 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.
    • 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.

  • Otherside of the coin (Score:2, Informative)

    by BarC0d3z ( 825670 )
    ZDNet blog on why the email/phone pitch is a wrong strategy: http://blogs.zdnet.com/ip-telephony/?p=1086 [zdnet.com]
  • Went through the whole process, as instructed on their web site, but step "4" is missing ...
    • 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!".

  • ...a great distrubance in The Force.
  • Hope this helps

    Contact Questions [vonageipo.com]
    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

  • Legit or not? (Score:3, Informative)

    by robbo ( 4388 ) <slashdot&simra,net> on Wednesday May 10, 2006 @09:52AM (#15300537)
    Vonage is indeed doing an IPO and they announced [vonage-forum.com] a few days ago that US customers are eligible to buy in. However, the site linked [vonageipo.com] in this story looks like a phishing scam.
    • 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.

      • 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.
    • 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? (Score:2, Informative)

      by mtmra70 ( 964928 )
      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 upda
    • 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 t

      • Re:Legit or not? (Score:2, Insightful)

        by NM156 ( 31172 )
        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 an
    • 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/ [networksolutions.com]
      Name Server: DNS1-NYC.VONAGE.NET

    • Would you buy stock from this man? (Score:4, Informative)

      by mbook ( 782023 ) on Wednesday May 10, 2006 @11:06AM (#15301082)
      From the prospectus:

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

      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.

      • NO TOUCH! (Score:3, Informative)

        by 955301 ( 209856 )
        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. [sec.gov]

        Pay careful attention t
    • 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.
  • 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...
  • They filed their S-1 a while back. The story is true, despite commenters' claims to the contrary.

    Vonage S-1 [sec.gov]
  • From their SEC filings [sec.gov]:

    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,

    • Except they have a real business plan.
    • 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
  • 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
  • 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.

  • 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 fun
  • 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:
  • 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.

  • 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 i

  • 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 [sec.gov]
  • 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 month
  • 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 dismisse
  • From this recent SEC filing by Vonage [sec.gov] 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
  • 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 cu

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