multichannel connect
careers
all access

Technology

Vonage Ups IPO Ante

4/28/2006 8:00 PM Eastern

Nearly three months after filing an initial public offering prospectus with the Securities and Exchange Commission, Vonage Holdings Corp. finally priced its initial public offering last Friday. The Internet phone giant hopes to generate $575.2 million to $647.1 million, more than twice the amount it had originally hoped to raise.

Vonage said in the April 28 document that it plans to be listed on the New York Stock Exchange under the symbol “VG.” No date has been set for the IPO.

Back in February, Vonage said it expected to raise about $250 million from the IPO, but offered little detail as to how many shares would be offered or at what price.

Vonage now plans to offer 31.25 million shares (about 20% of its planned 155.7 million shares outstanding) at $16 to $18 each. Including underwriter overallotments of about 4.7 million shares, the total amount to be raised is expected to be between $575.2 million and $647.1 million. At the $18 offering price, Vonage would be valued at about $2.8 billion.

Citigroup, Deutsche Bank Securities, UBS Investment Bank, Bear Stearns & Co., Piper Jaffray and Thomas Weisel Partners are serving as underwriters.

By increasing the size of the offering so substantially, Vonage has likely received strong interest from potential investors.

Vonage said it had about 1.6 million subscribers as of April 1, an increase of about 200,000 customers since February.

Vonage founder and chief strategist Jeffrey Citron will control about 48.4 million shares after the offering, or about 33% of its outstanding stock, making him the largest single shareholder.

Citron was fined $22.5 million by the SEC in 2003 relating to his involvement with online brokerages Datek Securities Corp. and Datek Online Holdings Corp. He admitted no wrongdoing but was barred from being associated with any securities broker or dealer.

Citron is not banned from running Vonage, but the VoIP provider conceded in the IPO filing that some financial institutions and accounting firms have declined to do business with Vonage because of Citron’s past.

Vonage has grown rapidly since its inception in 2002. Revenue for the first nine months of 2005 was $174 million, compared to $971,000 in 2002. But losses have ballooned at the same time, rising to $189.6 million in the first nine months of 2005 compared to a loss of $12.7 million in 2004.

 

Alert to All Users of the Disqus commenting system:
Because of a recent global security issue, the Disqus website recommends that all users change their Disqus passwords. Here's a URL about the issue:
http://engineering.disqus.com/2014/04/10/heartbleed.html

 

April