The voice over Internet protocol company became huge in the 2000s and seemed to be ready to go public by the time of its IPO in 2006. Vonage even surpassed its IPO expectations, raising $530 million and pricing at $17 a share. But the good times didn't last long.
Leading up to the IPO, the company solicited its customers to buy shares in the company. Vonage advertised to its users "Love our service? Then buy our company." But things didn't go as smoothly as hoped when the company started trading.
The website that Vonage built for customers to buy shares suffered a technical glitch that caused many customers not to be able to buy shares immediately. And by the time those who had managed to buy shares were informed they were owners, the price of the stock had already dropped significantly. But the new owners still had to pay the $17 IPO price.
By the end of the first week the stock price had dropped 30 percent.
A class action was filed against the company and its underwriters also got hit with fines. Vonage reached a deal to settle the class action. Details of the settlement were not disclosed.
Vonage declined to comment.