Vonage Holdings Corp. stock on Wednesday took a nearly 48 percent dive bottoming out at 94 cents per share and surpassing the previous all-time low of $1.20 after it got hit, twice, with more bad legal news.
On Wednesday, a federal appeals court reaffirmed an earlier order that bars Vonage from using VoIP-PSTN connection and calling technology owned by Verizon Communications Inc. The court called for more proceedings, however, into the third patent Verizon says Vonage violated. The judge wants a recalculation of damages and royalties from the March verdict of $58 million, on top of 5.5 percent in royalties.
That comes a day after a federal jury found Vonage guilty of infringing on some Sprint Nextel Corp. patents. Sprint sued Vonage two years ago, claiming Vonage was violating seven of its telecom technology patents. Jurors on Tuesday agreed with Sprint and ordered Vonage to pay $69.5 million, plus 5 percent in royalties on future revenue.
Vonage plans to appeal.
The company said in a statement that it has a workaround to the Verizon technology, so it doesnt expect the appeals court ruling to adversely impact business. That workaround was expected, said analysts for investment bank Stifel Nicolaus. The key question now is whether they have done so in a way that will survive scrutiny by Verizon, wrote Blair Levin, Rebecca Arbogast and David Kaut in a research note to clients.
Meanwhile, Vonage stock fluctuated between 94 and 95 cents per share near the end of trading on Wednesday. This marks the lowest point the struggling company has seen, despite improved second-quarter earnings and a revamped management team.