Editing Vonage (section)

=== Initial public offering ===
[[Image:Vonage Technology Center building in Holmdel.jpg|thumb|right|The Vonage building in Holmdel, New Jersey]]

In 2006, in preparation for an initial public offering, Michael Snyder, former president of [[The ADT Corporation|ADT Security Services]] replaced Vonage co-founder Citron as the organization's CEO.<ref>{{Cite web |last=Reardon, Marguerite |title=Vonage shuffles management |url=https://www.cnet.com/news/vonage-shuffles-management/ |access-date=2016-04-26 |website=CNET}}</ref> Citron could not preside over the [[IPO]] because he was permanently barred from associating with any securities brokers or dealers.<ref>{{Cite web |last=Shaw, Russell |date=2005-08-25 |title=Report: Vonage CEO's past woes won't block Vonage going public |url=https://www.zdnet.com/article/report-vonage-ceos-past-woes-wont-block-vonage-going-public/ |access-date=2016-05-08 |website=ZDNet}}</ref><ref>{{Cite web |date=2003-02-06 |title=Administrative Proceeding File No. 3-11031 In the Matter of Jeffrey A. Citron |url=https://www.sec.gov/litigation/admin/34-47323.htm |access-date=2016-05-08 |website=SEC}}</ref><ref>{{Cite web |last=Barboza, David |date=2003-01-15 |title=Online Brokers Fined Millions In Fraud Case |url=https://www.nytimes.com/2003/01/15/business/online-brokers-fined-millions-in-fraud-case.html |access-date=2016-05-08 |website=New York Times}}</ref><ref>{{Cite web |last=Boorstin, Julia |date=2004-03-01 |title=Talk Gets Cheaper: Jeffrey Citron's last venture got him banished from trading stocks. Now he's getting aggressive in a hot new industry-routing phone calls over the Internet. |url=https://money.cnn.com/magazines/fsb/fsb_archive/2004/03/01/363892/ |access-date=2016-05-08 |website=CNN}}</ref> In 2007, in a restructuring effort to reduce ongoing net losses in the face of double-digit stock price slips and patent infringement issues, Snyder resigned, and Citron returned as interim CEO.<ref>{{Cite web |last=Weiss |first=Todd |date=April 12, 2007 |title=Vonage CEO resigns, Company Moves to Cut Costs |url=http://www.computerworld.com/s/article/9016340/Vonage_CEO_resigns_Company_moves_to_cut_costs_?taxonomyId=16&taxonomyName=networking_and_internet |website=[[Computerworld.com]]}}</ref> The company announced plans for 10% layoffs as it secured $215 million in financing.<ref>{{Cite web |last=Gardner |first=W. David |date=April 12, 2007 |title=Vonage Prepares To Cut Workforce 10% |url=http://www.informationweek.com/hardware/showArticle.jhtml?articleID=199000539&subSection=Telecom |website=[[InformationWeek]]}}</ref>

Vonage offered shares of its stock to its existing customer base in the period before the initial public offering.<ref>{{Cite web |title=Vonage {{!}} Investor Relations {{!}} Stock Information {{!}} Stock Quote & Chart |url=http://ir.vonage.com/stockquote.cfm |url-status=dead |archive-url=https://web.archive.org/web/20160417030304/http://ir.vonage.com/stockquote.cfm |archive-date=2016-04-17 |access-date=2016-04-26 |website=ir.vonage.com}}</ref> Under normal circumstances, only large institutional investors such as banks are able to buy shares of an IPO.<ref>{{Cite web |title=Initial Public Offerings |url=http://www.investorguide.com/igu-article-821-stock-basics-initial-public-offerings.html |url-status=dead |archive-url=https://web.archive.org/web/20121113132426/http://www.investorguide.com/igu-article-821-stock-basics-initial-public-offerings.html |archive-date=2012-11-13 |website=Investorguide.com}}</ref> Vonage's initial public offering occurred on the [[New York Stock Exchange]] on May 24, 2006, opening at $17 per share.<ref name="Vonage Investor Relations FAQs" /> The price closed at $14.85, a decrease of 12.7 percent, the worst trading day for any [[Initial public offering|IPO]] in 2006 up to that point. The IPO raised $531 million for the company. However, the existing customers who lost money filed a [[class action]] lawsuit.<ref>{{Cite web |last=Reardon |first=Marguerite |date=2006-06-04 |title=Investors sue Vonage over IPO – CNET News |url=http://news.cnet.com/2100-1036_3-6079765.html |url-status=dead |archive-url=https://web.archive.org/web/20121104141751/http://news.cnet.com/2100-1036_3-6079765.html |archive-date=2012-11-04 |access-date=2016-04-21 |website=[[CNET News]]}}</ref> The IPO and its immediate aftermath also earned Vonage a ''[[Business 2.0]]'' Magazine award as 14th of 101 Dumbest Moments in Business for 2006.<ref>{{Cite web |last1=Horowitz |first1=A. |last2=Jacobson |first2=D. |last3=McNichol |first3=T. |last4=Thomas |first4=O. |date=March 7, 2007 |title=101 Dumbest Moments in Business |url=http://money.cnn.com/magazines/business2/business2_archive/2007/02/01/8398990/index.htm |url-status=dead |archive-url=https://web.archive.org/web/20070309130037/http://money.cnn.com/magazines/business2/business2_archive/2007/02/01/8398990/index.htm |archive-date=2007-03-09 |access-date=2009-04-11 |website=[[CNN.com]] |language=en}}</ref> In 2009, Vonage reached an agreement with the IPO investors. All shareholder claims against Vonage and its individual directors and officers who were named as defendants were dismissed.<ref>{{Cite web |last=Weinberger, Evan |date=2009-06-18 |title=Vonage Says Deal Pending In Shareholder IPO Suit |url=http://www.law360.com/articles/107066/vonage-says-deal-pending-in-shareholder-ipo-suit |access-date=2016-05-08 |website=Law360}}</ref><ref>{{Cite web |title=Vonage Holdings Corporation Securities Litigation |url=http://securities.stanford.edu/filings-case.html?id=103622 |access-date=2016-05-08 |website=Stanford Law}}</ref> The amount of the settlement, $3.6 million, was paid by an insurance policy covering the directors and officers of the company.<ref>{{Cite web |date=24 May 2006 |title=Vonage To Settle Shareholder Suit Over IPO |url=http://www.thestreet.com/story/10519948/1/vonage-to-settle-shareholder-suit-over-ipo.html |access-date=2016-04-26 |website=TheStreet |language=en-US}}</ref><ref name="pr.vonage.com">{{Cite web |title=Vonage Holdings Corp. Announces Agreement in Principle to Settle IPO |url=http://pr.vonage.com/releasedetail.cfm?releaseid=390447 |url-status=dead |archive-url=https://web.archive.org/web/20160306224018/http://pr.vonage.com/releasedetail.cfm?releaseid=390447 |archive-date=2016-03-06 |access-date=2016-05-08 |website=Vonage.com}}</ref><ref>{{Cite web |title=In Re Vonage Initial Public Offering (IPO) Securities Litigation |url=http://securities.stanford.edu/filings-documents/1036/VG_01/2009915_m_0700177.pdf}}</ref>

The firms underwriting the IPO, [[Citigroup]], [[UBS]], and [[Deutsche Bank]], were fined a total of $845,000 and ordered to reimburse customers for "failure to adequately supervise communications" with investors.<ref>{{Cite news |last=Shwiff |first=Kathy |date=September 24, 2009 |title=Citi, UBS, Deutsche Fined Over Vonage IPO |url=https://www.wsj.com/articles/SB125363508003831103 |work=[[Wall Street Journal]]}}</ref> NYSE regulators went so far as to investigate possible short-selling.<ref name="reutersSep22">{{Cite news |date=September 22, 2009 |title=Citi, UBS, Deutsche Bank fined over Vonage IPO |url=https://www.reuters.com/article/finra-vonage-fines-idUSN2233495620090922 |work=[[Reuters.com]]}}</ref>