After the Vonage IPO train wreck as Gordon described it, apparently at least one law firm is looking to put together a class action suit against Vonage. Vonage stock, which was priced at $17 a share is now trading at a little under $12. Vonage encouraged many customers to purchase the stock. Those customers are not just disgruntled by the stock's fall, but apparently can cite some potential Securities Act violations. Hence, Vonage apparently sent an email to customers encouraging them to invest without providing a link to the prospectus. Vonage also appears to have left voice mail messages with customers that did not include information about how to get a prospectus. While these acts may not pose a problem in an IPO that does well, they could leave the door open for suits when the IPO takes a nose dive as this one did. We will just have to wait and see how things shake out.
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