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Monday, June 5
by
Mark Evans
on Mon 05 Jun 2006 08:01 AM EDT
Vonage's much-maligned IPO got attacked again with the launch of a class-action lawsuit (hat tip to Alec Saunders). The lawsuit, filed last week in the U.S. District Court for the District of New Jersey, alleges Vonage "violated federal securities laws by publishing a materially false and misleading" prospectus, and that company insiders, "desperate to executive an exit strategy for themselves, embarked on an illegal course of conduct to sell shares of the company in a public market". Since Vonage shares started trading two ago, they have tumbled nearly 30% to $11.98 from $17 - and you wonder why shareholders are so pissed off. Then again, if they had read the prospectus, they would have known Vonage's prospectus are, at best, uncertain as spends like a banchi on marketing to play in an ultra-competitive market with no barriers to entry.
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