Despite the current problems of Vonage, the VoIP service provider, and two class-action lawsuits, their chairman and founder, Jeffrey Citron is the half-billion dollar man. At least on paper. He put in $80+Mln before the Vonage IPO, which bought him nearly 50 mln shares at $1.71. Let’s see. I’m rounding, but since Vonage (NYSE: VG) closed at 11.79 on Jun 8/06, that’s about 50 mln x 12 = $600 mln. If the stock rebounds and goes up to $20, he’ll be a billion-dollar baby at only 35 years of age. And this doesn’t even include any stock options he might be entitled to.
Now before you get upset, this practice is fairly common for company founders and other execs, even employees. Although employees do not get as large a cut of shares, numerous employees of little old RIM (makers of the Blackberry PDA) for example, became millionaires after the company went IPO.
Employees at other tech companies in the Waterloo, Ontario, Canada area (home of RIM headquarters) have done fairly well for themselves. I know of at least a couple of people who quit their jobs and followed their private dreams. But their windfall doesn’t compare to that of employees of bigger American tech firms that went IPO.
However, Citron can’t enjoy his big bucks just yet. According to US Securities law, he has to wait 180 days after IPO. D-Day is thus Nov 21, 2006. Let’s see what happens to Vonage, and whether Citron sells any shares.
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