Andy Kessler writes in, joining the Vonage-bashing fray, and explaining the full extent of the screwed-ness:
When you use retail to price a deal, you are always asking for trouble. The syndicate dude at Citigroup lost the poker game--he stupidly tried to signal that the deal was over-subscribed, but only raised the number of shares, not the price. then pricing it at the midpoint of $16-18 at $17 was another signal of weakness. Breaking price is bad form, but breaking that $16-18 range in the first hour is even worse, every Tom Dick and Scary retail investor is now unloading their 1300 shares. also looks like the specialist at the NYSE stepped away. U-G-L-Y
it may still trade up. there are always tricks, like Citigroup buying in, but no way to really know another case of Wall Street Buffoonery. Citigroup smelled the 7% IPO fees on $500 million, but may lose that much keeping this stock above $15.
(The above left graphic, in case you're wondering, is "screwed on crack.") Speaking of Scary Retail Investor, see below: the email that went out to the "Vonage Customer Directed Share Program" about the IPO. And from now on, we're going to refer to questionable friends-and-family rounds as "customer directed share programs."
> Date: Tue, 16 May 2006 17:52:09 -0400 (EDT)
> From: Vonage IPO Information
> Subject: Vonage Information: Conditional Offer Due
> At the request of Vonage Holdings Corp., you have
> been invited to participate in the Vonage Customer
> Directed Share Program relating to Vonage's proposed
> initial public offering (IPO).
> This message is being sent to remind you that if you
> would like to participate in the Vonage Customer
> Directed Share Program your conditional offer is due
> by May 19, 2006 before 4PM EST (1PM PST). Please be
> advised the website will close at this time for new
> conditional offers.
> To access the login page for the Vonage Customer
> Directed Share Program website, click on the
> Internet address below or copy and paste it into
> your browser.
> Please click here to open the current prospectus,
> which is located at:
> Vonage Holdings Corp. has filed a registration
> statement (including a prospectus) with the
> Securities and Exchange Commission (SEC) for the
> offering to which this communication relates.
> Before you invest, you should read the prospectus in
> that registration statement and other documents
> Vonage Holdings Corp. has filed with the SEC for
> more complete information about the issuer and this
> offering. You may get these documents for free by
> visiting EDGAR on the SEC Web site at www.sec.gov.
> Alternatively, the issuer, any underwriter or dealer
> participating in the offering will arrange to send
> you the prospectus if you request it by calling