VoIP service provider Vonage (NYSE: VG) may have violated securities law when they offered share purchases to existing customers without showing them a prospectus or providing them a link (on the website). [via IP Democracy]

It’s these customers who committed but did not purchase shares that are the source of the hubbub surrounding the Vonage IPO. By US SEC (Securities and Exchange Commission) rules, Vonage is required to now force these customers to complete their share purchases.

Of course, customers don’t want to do this because the share price has dropped on the market to below the offering price.

I see three paths for Vonage at this point:

1. They’ll recover by announcing something special: a new phone, a lower service price, whatever.
2. They’ll sink and get bought out by a VoIP hardware company. Or Microsoft.
3. They’ll sink and go bankrupt, giving VoIP IPOs (or VoIPOs, as some people call them) a bad name.

But I don’t see #3 happening, since all indicators are that VoIP is here to stay and will probably eventually replace POTS (Plain Old Telephone System) in many parts of the world.