Vonage isn't going to repurchase any of the shares of common stock from its customers after all. The company, coming off a disastrous IPO, released a statement saying it was clarifying the company's position on the matter. "Pursuant to the terms and conditions of our Customer Directed Share Program, if a customer was allocated shares in the Customer Directed Share Program, that customer is obligated to purchase their share allocation from the underwriters. To be clear, we have not offered and are not offering to repurchase any of the shares of common stock from our customers," the company said. The media speculation came from Vonage's IPO prospectus that detailed its intention to cover the underwriters' costs if customers refused to pay and its comments released to CNBC indicating that Vonage didn't want to alienate its customers. We could see lawsuits fly on both sides of the issue.
For more about Vonage's intention not to buy back shares of its customers:
- read this article [1] from TMCnet
- check out this report [2] from The Wall Street Journal (sub. req.)
Links:
[1] http://news.tmcnet.com/news/it/-vonage-ipo-customers-/2006/06/01/1666349.htm
[2] http://online.wsj.com/article/SB114911350738467925.html?mod=telecommunications_primary_hs