NEW YORK (AP) ¿ Internet phone company Vonage Holdings Corp. said it has agreed to settle a shareholder lawsuit that alleged the company bungled its initial public offering in 2006. The Holmdel, N.J., company announced the agreement late Thursday, saying the settlement amount would be covered by its directors and officers insurance policy. The 2006 IPO was a disaster for investors. They bought the shares for $17 each, then saw the value fall 13 percent when they opened for trading on May 24. They were trading at 45.5 cents on Thursday morning, up 4.5 cents. Atlanta-based law firm Motley Rice LLC filed suit on behalf of shareholders a week after the IPO, alleging that Vonage erred when it reserved 13.5 percent of the IPO shares for customers of phone service. These were not serious investors, the suit alleged, and the failure of some of them to pay for the shares exacerbated the decline in share value. The parties did not immediately respond to questions about what the settlement would mean for shareholders. The settlement is subject to court approval.
TheStreet’s Fundamentals of Investing Course will teach you the keys to making the right decisions in any market.
TheStreet’s Personal Finance Essentials Course will teach you money management basics and investing strategies to help you avoid major financial pitfalls.
TheStreet Courses offers dedicated classes designed to improve your investing skills, stock market knowledge and money management capabilities.
More from Technology
Alphabet Stock Is Just Too Cheap After Its Recent Selloff
The tech giant remains an absolute cash cow with over $113 billion on the balance sheet and trades for a reasonable 25x forward earnings. The post-earnings selloff is overdone.
Huawei-Related Stocks Fall: NeoPhotonics Up 7.4%; CommScope Holding Off 8.8%
Gainers trail losers among stocks with significant business with Huawei.
More Q1 Earnings to Come; Chip Makers Face Huawei Headwinds -- ICYMI
Need help sorting out what chipmakers to buy and sell? TheStreet's premium sister site Real Money tells.