According to Pulver.com's Jonathan Askin, Vonage plans to raise more private equity rather than do an IPO – a development reported several weeks ago by BusinessWeek. There a several ways to look at Vonage's plans. The most straightfoward is if it can raise more private equity to drive subscriber growth and turn profitable in the process, why do an IPO? The more intriguing reason to avoid an IPO could involve Vonage CEO Jeff Citron's settlement with the SEC in 2003. While this is just speculation, Citron may be barred from serving as a director and/or executive with a publicly-traded company. This means Citron would have to step aside for Vonage to do an IPO, or he'll continue as CEO until Vonage solicits a takeover offer. If I was a betting man, I'd say Vonage and its institutional investors are counting on a deal happening this year.
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2 Comments
Very interesting thoughts on Citron. If true, then I would want Citron out as an investor. The goal as an investor is to sell your shares for more money and no-IPO makes this difficult.
Randy
Bankers on Wall Street have been saying they can't take Vonage publuc w/ Citron as the primiary shareholder, CEO, and director for the company. Also, there is talk that the window of opportunity for Vonage is quickly closing to go public or get acquired because all the majors who could afford to buy the company have launched or are launching their own competing service.