Vonage Acknowledges Lawsuits, NYSE Investigates ‘Shortselling’

Vonage Holdings Corp. on Thursday acknowledged it is the target of two shareholder lawsuits, as various media had been reporting throughout the week.

Shareholders are alleging securities fraud. Vonage said in a statement it will “contest the allegations vigorously and address them through the appropriate legal process.”

The company said the complaints contend Vonage left out or misstated facts regarding the IPO's customer-directed share program. “One of the complaints additionally claims that the IPO prospectus allegedly contained misrepresentations or omissions concerning various Vonage products, including facsimile transmission capability,” the Vonage statement further read.

Vonage said it has not seen copies of either complaint.

In the meantime, the Wall Street Journal reported on Friday that New York Stock Exchange regulators are investigating whether shortsellers contributed to Vonage’s weak market debut. Shortsellers sell borrowed stock, hoping to profit by buying it back at a lower price; they often create steep drops in share prices. Vonage went public in May and its stock price fell about 30 percent from its initial price of $17. Shares were trading at $11.90 in the midafternoon on Friday, barely up from its morning opening price of $11.89.

Vonage Holdings Corp. www.vonage.com

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