Vonage Founder Citron Cashes In

Jeffrey Citron, the founder of Vonage Holdings Corp. (VG), sold some of his company’s shares this week, and may sell more.

That’s according to a Securities & Exchange Commission (SEC) filing made on Friday.

Citron – who now serves as board chairman since he’s barred by the SEC from flat-out running a public company – still owns about 28 percent of Vonage common stock but here’s the kicker, in Citron’s words: “My decision to sell a limited amount of my holdings in Vonage reflects the advice of my financial and estate planning advisors to broaden my investment portfolio. I remain fully supportive of Vonage management.”

Is that so?

Vonage just reported third-quarter losses of $54.6 million; the losses stemmed in part from 50,191 subscriber cancellations. And this week, Vonage settled a big case with 32 state attorneys general. The company will pay $3 million to make up for unfair business practices (Vonage admitted no guilt in the settlement). Finally, Vonage stock continues to struggle. On Friday alone the company’s shares closed lower – down 3.33 percent at $1.16.

You tell me. Is Citron just acting on some wise diversification advice or does he see the writing on Vonage’s wall? (Or is that a redundant question?)