Vonage legal woes could lead to bankruptcy-filing

Posts: 60 · Full Forum Member Joined: Jan 19, 2006 Posts: 60

I'm out. I'm not one to yell fire when all I see is smoke, but I think the smoke is definitely hiding the fire. I've already started the porting process to another provider. Good luck to all of you. No matter what Vonage says, their service will be affected in some manner and most likely to the detriment of the subscribers.

From MSNBC tonight:

NEW YORK - Internet phone service provider Vonage Holdings Corp., which was found to have infringed on three patents owned by Verizon Communications Inc. by a U.S. court, said its legal woes could lead to bankruptcy, according to a regulatory filing.

The filing with the U.S. Securities and Exchange Commission also detailed other risks from ongoing litigation. They include the possible interruption of service, an inability to repay its debt and a decline in its stock that could lead to the delisting from the New York Stock Exchange.

Read more by following the MSNBC link at the top.

Posts: 61 · Full Forum Member Joined: Mar 09, 2007 Posts: 61

I believe the stocks have fallen and cant get back up! I am looking but not finding anything as good as Vonage. I know Vonage has great sound, and has been kind of stable. I hate to switch and cant figure out where to go. I bought my house and was in it and it took about 30 days, looking for another company has taken more then that. Where in there world is my priorities.

Posts: 94 · Vonage Forum Senior Joined: Sep 15, 2006 Posts: 94

Regulatory filings are CYA filings -- they have to put in any possible scenario. Thus, I don't think this is really news . . . .

Posts: 2251 · Posted: Wed Apr 18, 2007 11:27 pm Post subject:

miked2 wrote:

Regulatory filings are CYA filings -- they have to put in any possible scenario. Thus, I don't think this is really news . . . .

Thanks Mike.

I read about possible Bankruptcies in just about every 10-K I read.

And Vonage was just being honest about some very unlikely scenarios.

The press is eating this one up like turkey on Thanksgiving.

Shame on the USA press for not doing a better job of reporting the facts.

They have all become link-bait professionals

Posts: 75 · Vonage Forum Senior Joined: Jun 01, 2006 Posts: 75

Unless they get bailed out (acquired) by another company, there's no reason to think that Vonage WON'T have to file for bankruptcy. Let's review the facts about this company:

- Share price has dropped more than 80% in less than a year, making it the single worst IPO of 2006 and one of the top ten worst IPOs in history

- Their market cap has gone from $2.6 BILLION to $477 MILLON

- Their CEO resigned

- Their new CEO's interests, according to Vonage's own SEC filings, "may not always coincide with the interests of other holders of our common stock."

- They've been ordered to pay $58 million in damages as well sizable royalty fees to Verizon for patent infringement

- They have "no workaround" for the Verizon patent infringement

- They are currently spending $275 per gross subscriber addition in marketing expenses

- Their QUARTERLY losses are still $65 million

- The number of new subscribers dropped from Q3 to Q4. What do you think the Q1'07 numbers are going to show?

In my opinion, their recent statement that they may face bankruptcy is the most honest thing to come out of this company since the IPO (unlike, for example, their press release hailing the fact that they were vindicated on four of seven patents - http://pr.vonage.com/releasedetail.cfm?ReleaseID=233155)

Here are some pretty good Motley Fool articles that summarize Vonage's current state:

http://www.fool.com/investing/general/2007/04/12/vonages-vile-outlook.aspx

http://www.fool.com/investing/value/2007/04/18/no-surprise-from-vonage.aspx

http://www.fool.com/investing/small-cap/2007/04/18/vonage-we-told-you-so.aspx