When I first heard that Vonage would allocate up to 13% of it’s IPO stock for current customers to purchase, I thought that was really cool that a VoIP Technology company would kick back some shares to the customers that helped it get to that point.

The IPO price of $17 per share seemed reasonable, and apparently a lot of Vonage customers seemed to think so as well.

Many of them agreed to purchase a certain amount of shares, apparently with no money up front. I am sure they figured that they would make some serious cabbage when Vonage went public. Then IPO day came around and by the end of the day and shares were down to around $12, about $5 below the IPO price of $17.

Of course, all the Vonage customers that participated were pretty pissed. I guess witnessing all their delusions of grandeur go -POOF!- in just a few hours was a pretty sobering experience. I’m sure plenty of them had bragged to their pals (who were still using plain old telephone lines) about their KOOL VoIP company and how they were gonna get some bucakroos on opening day, and that would surely come back to bite them in the you-know-what.

So what did they do? They got all mad and started openly stating that they would not pay for the shares that they agreed to. Since they hadn’t put up any cash yet, what was the worst that Vonage could do to them? Cancel their accounts?

Now I am no wall street whiz kid, but it doesn’t take much grey matter to understand that the stock market is risky business. Some people get extremely wealthy and some get completely ruined. I have a feeling that simply not paying when the time comes due is not appreciated.

To quote the great Peter Griffin, “What really grinds my gears”, is that these Vonage customers are now forming a class action lawsuit against Vonage to recoup their losses. Actions like this will surely discourage any other companies from trying to include their customers when going public.

Finally, let’s not forget that the stock market is an ever-changing entity. Vonage stock is on the rise – a modest increase, still under the IPO price, but nonetheless, the stock is recovering. I think that it would be sweet, sweet irony if the shares continue to rise as the class action lawsuit continues. What will these customers will be saying if Vonage stock climbs above that $17 mark during the course of the lawsuit?

Customers / Investors Sue Vonage Over IPO