10 IPOs that flopped
It may seem hard to believe now, but at one point, Internet telephony company Vonage dominated the voice over internet protocol market As formidable rivals cropped up, however, the company's management looked for some extra ammo: namely, cash. In May 2006, Vonage went public at $17 a share, raising about $530 million -- all in all, a successful offering.
There was just one small hitch: Vonage had offered a sizeable block of the IPO shares to its own customers. But a technical glitch slowed those trades dramatically (sound familiar?). Thus, purchases by Vonage customers of Vonage shares -- at a price of $17 -- didn't clear for several days. By that point, the share price had dropped by nearly 30%. Some customer/investors were clearly not amused, later suing the underwriters of the deal. They won the case. Woo hoo, woo hoo hoo.