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In Case of Emergency, Sue Customers

Biz BriefsVonage Holdings is in the awkward position of trying to retain customers while pursuing them for money they owe on shares of its poorly performing stock. During its May IPO, the Holmdel-based Internet telephone company had offered shares to customers, many of whom reneged on their decision to buy after the $17-a-share stock promptly dropped in price. The company, which had to fork over $17.9 million for subscribers who failed to pay, said last week that it “expects to pursue the collection of monies owed.” The IPO has spawned at least nine lawsuits, with some investors alleging Vonage failed to disclose certain risks.

On Tuesday, the day Vonage announced the plan to collect, its stock dropped 5.5% to close at $6.70.

Meanwhile, the company also released its second-quarter results. Vonage said it had added 256,000 subscribers in the three months ending June 30, its second-best quarter for customer growth. The new customers helped Vonage post $143 million in revenue, more than double the $59 million collected in the same period last year. Still, worse-than-expected subscriber turnover meant the company posted a loss of $74 million, compared with the same period last year when it lost $64 million. Vonage said it plans to post its first profit by the first quarter of 2008.

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