Vonage has been going through tough times lately. It is on the losing end of a patent lawsuit with Verizon communications. Verizon has accused Vonage of infringing several of its VOIP related patents. The company was slammed with an injunction on Friday morning that prevented it from adding new customers. However, Vonage got some mild reprieve on Friday evening when the injunction was temporarily lifted. Vonage will have 2 weeks to convince the court to stay the injunction. The injunction comes right after a 23rd March court decision forcing Vonage to stop using all technology that infringes on Verizon patents.
Vonage stocks have been falling steadily since its May 2006 IPO, from $17 to $3.37. It suffered a 26% drop in share price after the Mar 23 judgement. The stocks fell a further 7% today. It is expected that the stocks will continue to fall below the $3 mark. In fact, many are speculating that the company may not survive this debacle at all. A Vonage lawyer has been quoted as saying that the injunction court order was the equivalent of "cutting of the Oxygen" to Vonage. Verizon's stocks on the other hand, have been steadily rising throughout this episode.
Verizon currently has about 2.2 million customers and claims to be losing over 50,000 customers a month. It has cash reserves of about $500m.
Sources:
http://origin.mercurynews.com/business/ci_5609388
http://money.cnn.com/2007/04/06/technology/vonage.reut
$2.9 (04/07/07)
