I, too, am a happy Vonage customer. So when I received the invitation to participate in its IPO, it made me curious. But after reading about the background of Jeffrey A. Citron (Vonage's "principal stockholder, founder, Chairman and Chief Strategist" and former CEO) and his run ins with the law, it made me nervous. More importantly, I decided not to participate in the IPO. You can read all the juicy details here:

http://www.sec.gov/cgi-bin/browse-edgar?company=vonage&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany

In my opinion, this clearly is an individual who puts his own interests first – above those of his shareholders or customers. Given the increased competition in VOIP from the big players (AT&T, Verizon, etc.), I think the IPO is a desperate attempt by Vonage execs to cash out before the competition beats them down, especially since it was reported that Vonage is now allocating 15% of IPO shares to its customers. In the really hot IPOs, do the customers ever get to participate to such an extent?

After the IPO, Citron will own approximate 31% of Vonage. If its shares are priced at $14 - $16 dollars (as the company hopes it will be), then Citron will hold Vonage shares worth approximately $775 - $872 MILLION! And you don't think he's trying to cash out?!?

I am a systems integrator. I work with data, phone, TV and security systems everyday. I set up systems for colleges and hotels. I tried Vonage for our new office phone system. I could not get it to ring through consistently. Calls were not completed, some were dropped. For one week I had no phones at all. Customers would write e-mail or call my cell phone to ask if we were still in business. They would get messages saying that my number was disconnected or that it was not valid.

I spent over 11 hours on-line or on hold trying to get help, most of it on hold. When I called to cancel service I told them that I needed to keep the number and it would take a few days for the phone company to connect me again. They cut me off right then. I had no phone service. Qwest could not reconnect me with that number unless it was active. I had to spend 3 hours trying to get Vonage to activate the number again. Then they gave me a temporary number for 3 days, which no one knew to call, before I got my old number and same crappy service back. When I was finally connected to a land line again they gave me a $12.50 credit for my troubles.

Vonage should be put out of business. They ruined mine for almost a month. They have a cruddy product, lousy service and tech support and terrible business practices.

If you have to choose between two cans and a string and Vonage, take the cans and string. You'll be happier with the service.

This Vonage IPO was conceived much earlier. However, the timing for selling shares to the public appears late in this current market cycle. Pricing the per share price at between $16~$18 is a bit excessive considering Vonage's acquisition/retention cost for current and future customers. Ideally this price should be quantified around $10~$12 in contemplation of "some" upside in the after market trading(i.e., post IPO). Downside after market trading price creates potential (if not considerable) risks losses for participants in the IPO.

I feel sorry for all satisfied Vonage customers who ended up loosing money in this IPO. Dropping 25% in two days is bad enough, but now it seems that some investors were actually told they had been allocated 0 shares, just to find out after the drop that they got shares after all: Vonage Allocating Shares After The Fact?