vonage ipo; stock to customers?

by Pete Abilla on May 8, 2006

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my buddy sent this email to me. he’s a vonage customer, and apparently this email was sent to all vonage customers.

Dear Valued Vonage Customer,

As you may know, Vonage has filed a registration statement with the Securities and Exchange Commission (SEC) related to its proposed initial public offering (IPO) of common stock. Because much of our success is attributable to our customers, we have asked the underwriters of the IPO to reserve shares of common stock for sale to certain Vonage customers at the IPO price in a Directed Share Program.

You may be eligible to participate in the Directed Share Program if you meet certain eligibility requirements, including having been a Vonage customer from December 15, 2005 through February 1, 2006. You do not need to continue to be a Vonage customer in order to participate. Further information about the terms and conditions of the Directed Share Program, including the eligibility requirements and the process for participating in the program, are available in our registration statement and at the following website:

www.vonageipo.com

Thank you,

Vonage

Vonage Holdings Corp. has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents Vonage Holdings Corp. has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-866-869-5224.

This is a transactional communication, as defined by the CAN-SPAM Act, 15 USC 7701.

really interesting and very smart for vonage to invite and elicit a response from their customer base; very open.

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{ 1 comment… read it below or add one }

Dave Robinson May 9, 2006 at 9:33 am

Interesting strategy here. Vonage has been facing skepticism from the street as a result of steep operating losses the past few years (-$262mm in 2005). If the street doesn’t express confidance in you business, maybe your customers will? Vonage’s very visible media profile during ’05 came at the expense of $243mm in marketing. It will be intersting to see if this strategy of creating shareholders out of customers works. Stay tuned.

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