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The Company is a provider of broadband Voice over Internet Protocol services to residential and small and home office customers.
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myturnforfun (25.91) Submitted: 3/10/07 1:32 PM : Start Price: $4.06 VG Score: -32.30
Vonage is down huge because of the hype that the court will issue an injunction preventing them from continuing in business past march 23. It simply will NOT happen. It is likely the court will issue an injunction (under current law, it should.) But the court will also stay the injunction pending an appeal. The appeal process will take 2 years. And, well before that, one of several things will happen: 1) Vonage and Verizon will settle for a one time paid up license -- likely will be a large amount but will not require any change in Vonage's product offerings and will not impact cost of sales (because it is paid up.) 2) Vonage will be bought out; 3) Vonage will prevail in its patent litigation against Verizon (in which many, many more dollars are at stake) and Vonage will have significant leverage to settle both actions on a favorable basis. In summary, like most patent litigation, this case will work its way through the courts and the parties will reach a business resolution before a final judgment and before an effective (i.e., not stayed) injunction. The business resolution will not involve ongoing royalties and, therefore, will not impact cost of sales. So worst case scenario, Vonage pays Verizon some large ($50-100 million) one time payment in two years. Best case, Vonage wins its litigation against Verizon and the companies settle with Verizon paying a substantial payment to Vonage. In any event, it will NOT happen that an injunction is effective against Vonage. But, the market has panicked and some DUMB analysis have said that an injunction might issue. This stock will easily be back above 5 and maybe even to 6 in the next month as the panicked investor get out and the legal situation is better analyzed and understood by thinking investors.
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FeastOrFamine46 (99.87) Submitted: 3/23/07 2:38 PM
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Well, here's the injunction...
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thedorfplan (< 20) Submitted: 3/23/07 5:37 PM
oops
BrianRuth (99.73) Submitted: 3/28/07 5:01 AM
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I don't think it's down huge because of the prospect of an injunction. I think it's down huge because:a) it has no competitive moatb) it's bleeding cash (those silly commercials cost money)c) it's facing competition from Cable companies AND internet companies (Skype/Earthlink et al.)d) it's not signing up customers fast enoughWhile Vonage deserves credit for helping to popularize VOIP as an alternative, it's a dog with fleas. WOOF!
BrianRuth (99.73) Submitted: 4/06/07 1:07 PM
UH OH!http://www.engadget.com/2007/04/06/judge-no-new-customers-for-vonage/It did happen.Let's see where this stock goes on Monday. :-)
Allstar13913 (99.87) Submitted: 4/07/07 8:10 PM
You missed #44.) It will go out of business because its losing money before the appeal is heard. This is what I'm voting for. I'm closing my position Monday, and then reopening in a few days when the new suckers get in. :)
TimHedrick332 (37.42) Submitted: 5/26/07 7:40 AM
Well, there was the stay...
kwade79 (< 20) Submitted: 6/09/07 12:54 AM
I don't know which way to bet on VG, but I do know their product works just fine. The sound quality is excellent. As a service provider they are head and shoulders above Verizon, and I hope they make it. I'd really be disappointed to have to go back... Disclaimer: I'm not investing in either VZ or VG. I stay away from companies that get too seriously into the courts because as little as I know about business, I know even less about which way a court will decide.
bdmack (< 20) Submitted: 10/01/07 3:17 PM
I know this post is from March, but even if they make it through, there are many alternatives to Vonage that require no additional account , or equipment. And by the way, the recovery to 5 or 6? looks like $0.98 today.
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