Optical/IP Networks

XM CEO Tunes Out Vonage

Vonage Holdings Corp. (NYSE: VG) said Monday that one of its high-profile board members, XM Satellite Radio (Nasdaq: XMSR) CEO Hugh Panero, has vacated his post effective last Friday.

Panero cited “the demands of his role at XM” as the reason for his decision to leave.

Panero's decision comes after months of declining share prices for both Vonage and XM.

Vonage stock, which opened at $17 and dropped to $14.49 on its first day of trading, has traded at less than $8 per share since early June. (See Vonage Falls Hard & Fast in Public Debut.) Vonage shares were trading off 5 cents (7.7 percent) at $6.45 in mid-afternoon trading Monday. (See Vonage Doubles Revenues.)

XM shares traded at around $22 dollars at the beginning of May and have slid to the $11.50 range where they were trading last week. The XM shares were trading off 18 cents (1.57 percent) at $11.25 in mid-afternoon trading Monday.

“Hugh will be missed on the board; we wish him well and we thank him for his contributions," Vonage chairman and chief strategist Jeffrey Citron said in a statement Monday.

The company says it has no plans to fill Panero’s vacant seat on the board.

Also Monday, Vonage registered its pre-IPO bond offering on Form S-1 with the Securities and Exchange Commission (SEC) . Under the terms registered, note holders can convert their notes into Vonage shares at a conversion rate of $14.22 per share. The note holders are subject to a "lockup period" that expires on or about November 19, 2006. (See Vonage Files S-1.)

Vonage conducted the $250 million bond round last December. Under the terms of the round, Vonage was required to register the details with the SEC within 90 days of its IPO.

Vonage says it provided broadband telephone service over 1.8 million subscriber lines as of June 30.

— Mark Sullivan, Reporter, Light Reading

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