Vonage IPO investor: "I'm stuck with a dog of a stock"
In this morning's Wall Street Journal, Vonage IPO investor Greg Foulks is described as wondering whether he should stop payment on an $8,500 check he wrote to purchase 500 shares of Vonage.That's 500 shares of Vonage at $17- which, at the end of Tuesday's trading, are now priced at $12.
That's 500 shares of Vonage at $17- which, at the end of Tuesday's trading, are now priced at $12.50 a share.
"It's a big mess and we need Vonage to provide some answers," Mr. Foulks, of Columbus, Ohio, wrote in an email. "Meanwhile I'm stuck with a dog of a stock that will likely see $6 in the coming months."
Unnamed "experts" cited by the Journal said that if investors refuse to pay, they probably can't be sued by Vonage. But indemnified underwriters would have that option. The Journal notes that in SEC filings, Vonage stated that it "agreed to indemnify the underwriters" in case the customers turned investors fail to pay for and accept delivery of the stock.
Still, Vonage issued a statement to CNBC on Sunday saying that if investors did not want to pay, Vonage would likely buy back the disputed shares from the underwriters rather than see the underwriters sue individual Vonage investors and risk further ill will.