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May 8, 2006
Vonage IPOs to Itself
Vonage, the voice over IP company, is trying an interesting Ponzi-esque experiment in bringing its IPO to market:Vonage IPO to include its usersBy Paul Taylor in New YorkMonday, May 08, 2006
Posted: 12:10 PM EDT (17:10 London)Customers who have signed up for Vonage Holdings' broadband VoIP (Voice over Internet Protocol) service will be offered the chance to buy shares in the company when it floats its stock.
Vonage, which helped pioneer VoIP phone service in the US and has grown to become the country's largest independent internet phone service provider with 1.6m customers, said as much as 15 per cent of its planned initial public offering will be set aside for customers.
Anyone who opened an account on or before December 15 will be eligible to buy shares at the IPO price.
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I received the email invitation today... and it reminded me of good old W.R Hambrecht back in 1999. I opened an account in the hope of getting in on the IPO gravy train, since they advertised to be the "retail IPO brokers". Yeah, right. Little guys like myself never got an allocation - the only times we did were the duds that WRH was trying to dump on us.... and you better took it in the hope of an allocation in the 'real thing' one day.
So I guess when Vonage offers up it's IPO allocation to their own customers, it's not exactly a bullish indicator :-)