Vonage = Slippage

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By Douglas A. McIntyre Published
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Vonage (VG) already went from bad to worse, and today went to even FAR WORSE.  This was already one of the worst IPO’s in recent history.  Now it is not even possible to calculate the exact impact.  A federal judge issued a permanent injunction Friday that prevents Vonage from using key internet telephony technology rights owned by Verizon Communications (VZ).

The granted request to Verizon’s injuction prohibits Vonage from using some if the VoIP technologies that make their telephone calls work.  This one is not over yet, but there is probably going to be a lot more pain felt by shareholders.

Shares of Vonage were halted at 12:13:46 today, but it looks like the shares fell 6% more to $3.799 before the halt was enacted; no resumption time has been set.  This looks like it is going from ugly to fugly, and now there are questions of how Vonage will survive.  The company might not be able to afford the royalties that Verizon will demand, and if so then customers around the country will probably have to worry about getting new service installed elsewhere.

What would Homer say? Doh!

Jon C. Ogg
March 23, 2007

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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