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Vonage Sued Over IPO

Day Forex System Trading By Armando Duke

But when the IPO market is hot, a lot of traders buy into any new company. They commit a trading mistake that` They place market orders for an IPO before it starts trading on its first day, ups in price right when trading opens. For the trader, these orders are a sure way to lose money. Your order will end up being filled at a ridiculously high price that the stock options may never see again.

Beginner Day Guide Online (AXcess News) Houston, TX - Investors filed a class-action lawsuit against Vonage Holdings Corp. (NYSE: VG) Friday over its IPO, claiming that the offering to customers was a way to ensure the Offering would be filled due to concern from institutional investors.

Another basics of stock options trading play is to short stocks with upcoming IPO lockup expirations. An IPO lockup is a period of time, usually from six to eighteen months, when insiders who obtained the IPO at the offering price or less cannot sell their shares. Once this time period has elapsed, insiders often sell their shares. This trend is shortable because the greater the number of shares unlocked, the more likely it is that insiders will start to sell their shares, particularly if the market is not doing well but the share price is still higher than the IPO offering price. And the more shares freed, the better the chance of a negative effect on the share price. This trade works best when the number of shares being unlocked is more than 25% of the current market capitalization.

Broker Day Online Trading The lawsuit wasfiled in theUnited States District Court for the District of New Jersey Friday by the Atlanta law firm of Motley Rice on behalf of shareholders.

Shaw's filing Friday was to support its argument in order to force Vonage to stop promoting its services as if it were Vonage's. Shares of Vonage closed down 22 cents, or nearly 2.25%, at $9.60 on Friday in New York trading. Shaw, which this week announced the acquisition of two privately held cable television companies, saw its shares close down 26 cents at $27.34 in New York.

Day Strategy Trading The lawyers claim that shareholders losses since the debut of Vonage's IPO are directly related to the company and investors pushing an IPO intended to pay off debt, knowing the Internet telephony provider was losing money.

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Day System Trading An alert reader pointed out to AXcess News Saturday that Vonage nor its underwritershadn't doneany preliminary screening of its investors, referring to the offer being made to Vonage customers. "They were supposed to by law," said AXcess News' reader. "They didn't. If the NASD and the NYSE don't jump in early this week to pull the plug on the IPO, then Vonage IPO participants will have to depend upon the emerging number of class action law suits." But it appears that Motley Rice was one step ahead of AXcess News' reader and filed its class-action suit Friday.

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Day Signal Trading Last week shareholders who bought stock in the Vonage IPO began having second thoughts. Vonage released a statement saying that those customers who bought shares had to pay for them, while on Tuesday, Vonage said that its underwriters would not be liable, implying that investors themselves could back out of paying for their IPO shares.

Day Rule Trading Motley Rice says that Vonage's actions are directly tied to the loss in share price and accuses the Internet telephone provider of breaking several laws.

Day Tip Trading The Atlanta lawfirm saidVonagepre-sold at least 13.5% of the Company's IPO shares to its customers in violation of NASD Rule 2310. NASD Rule 2310 requires that a company recommending the purchase or sale of its securities to a customer must have a reasonable basis for believing that the recommendation is suitable for the customer. The Complaint also allegesVonage improperly crammed investors into the Vonage IPO regardless of their suitability.

Day Firm Trading Lawyers for Motley Rice stated in an announcement Saturday, "Vonage had agreed to indemnify the Underwriter Defendants against certain liabilities relating to the customer pre-sale program; among those liabilities was the foreseeable possibility that customers who purchased in the IPO would refuse or fail to pay for the common stock allocated to them in the pre-sale."

Book Day Trading "As a result of this alleged illegal conduct, shares of Vonage sold in the IPO declined more than 30% in the first seven trading days. The decline in value of these shares has been substantially exacerbated by many Vonage customers who participated in the pre-sale now refusing to pay for their shares," the lawyers concluded.

Day Market Stock Trading Motley Rice is urging Vonage customers andinvestorswho bought shares in its IPO to contact to the law firm.

Day Search Trading Shares of Vonage rose 30 cents, or 2.5 percent, to $12.28 in early afternoon trading Monday following news of the IPO class-action lawsuit.

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