Vonage Shares Fall to New Low on Latest Ruling

Authored by Scott Goldberg on April 9, 2007 - 1:36pm.

New York – After a judge said today that Vonage Holdings Corp., the internet phone company, could not add new customers because of its copyright infringement on Verizon Communications Inc., shares fell 11% to $2.88, a new low. The price marks an 83% decline since the IPO less than a year ago.

“The legal battle appears to worsen at every step for Vonage, and the uncertainties have become magnified,” said Stanford Group analyst Clayton Moran.

The latest ruling follows on the heels of the March ruling when a jury decided Vonage had infringed on three Verizon voice over internet protocol (VoIP) patents. Vonage was ordered to pay $58 million, plus royalties on future sales, to Verizon.

Vonage said on Monday that service for existing customers will continue. The company is scheduling a conference call for Thursday to discuss ways it will work around Verizon’s patents.

“Vonage also continues to believe that this case is an attempt to do in the court room what Verizon could not succeed in doing in the marketplace -- which is to put Vonage out of business,” said Vonage in a statement.

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http://tinyurl.com/2bk3c4 (Reuters)