Vonage may sue its IPO customers
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Tough time for Vonage. Their customers are turning into a wild mob seeking retaliation. Today, the Wall Street Journal reported that a missing link in a prospectus could make the IPO an “illegal offer” in violation of securities laws.
Rebounding on those technical errors, some customers who participated in the buying program may have grounds to seek damages or require the company to buy back shares at their IPO price of $17 per share, reported the WSJ.
But who’s right? On the Vonage forum, members don’t feel like Vonage listen to them. Instead, Vonage seems determined to treat its customers as pure anonymous investors:
“If they don’t pay, we will reserve our right to pursue payment,” said Brooke Schulz [a Vonage spokeswoman]. She added that speculation that the company intends to buy shares back from disappointed investors are false. “They are taking a risk if they choose not to pay,” she said.
Vonage is getting itself into a harsh situation. A dilemma. Whether it looses money playing the nice guy with its customers, whether it looses them. As we write, the Vonage share price seems to recover a bit, at $11.99, after bottoming at $11.6.
Jun 2, 2006 | By Nuno
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