Honey, remember how disappointed we were when we didn't get our full Vonage IPO request?

Vonage customers who took the company up on its offer of reserved shares in its initial public offering are no doubt kicking themselves today after the stock took is first tentative steps, then slipped deep into the mud. Priced Tuesday at $17, shares in the company are trading today at about $13.19, making Vonages’ the weakest initial public offering of the year. Bottom line: Vonage customers who bought into the company’s IPO at $17 took a bath. And that kind of soaking isn’t going to inspire the sort of customer evangelism the company was hoping for when it announced its Directed Share Program common stock offering (see “Now why couldn’t Google have done something like this?“). In fact, it may end up doing the reverse. To wit, this dismal little anecdote from the Associated Press:

Anthony Sgroi of Bergen County, N.J., has had Vonage service for a year and half, and asked for 1,000 IPO shares. He received 300. Other Vonage customers on an online forum reported similar allocations, indicating strong interest from the group.

It wasn’t the company’s long-term prospects that attracted Sgroi to the deal, however.

“I’m not a big stock market guy … when I got the option to buy the IPO, I figured it was a chance to make some quick cash,” Sgroi said. “I was planning to sell within a week or so anyway.”

He sold the stock Wednesday morning at a loss. Now, he plans to cancel his Vonage account and switch to the local cable company’s competing service, which he said would save him $10 a month.

“I’ll try to recoup some of my losses that way,” Sgroi said.


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  • Mark

    I signed up for 200 shares and was denied any shares when the IPO opened up. Dodged that bullet!

  • Lloyd

    By deliberately increasing the number of IPO shares recipients turned sellers looking to make a quick buck, the IPO created the worst possible conditions for a quick run up of the stock price and probably allowed serious investors in the company to accumulate stock at a discount to the price behavior in a typical post-IPO market where only a few chosen IPO recipients/ quick sellers were considering selling.

  • Nick

    Gosh darn it my Internet service isn’t working! I gotta call and see what’s happening. Oh no, I almost forgot: my phone doesn’t work cause my Internet doesn’t work!!!

    But at least I saved $5 on my monthly bill 🙂