Vonage Shares Drop on Court Order
Shares of Vonage Holdings. Corp. (NYSE: VG) tumbled more than 10 percent in morning trading after a judge granted the firm an emergency stay on a ban from signing up new customers.
On Monday a federal court judge in Washington D.C. issued a stay on the ban it passed on Friday due to a finding that Vonage had infringed on patents from Verizon Communications. The technology in question deals with the way Internet calls are routed to landline phones.
With the ruling, Vonage can continue to provide digital telephone service to existing customers indefinitely by paying into escrow a quarterly royalty of 5.5 percent throughout the appeals process.
Separately, the District Court required Vonage to post a bond of $66 million to secure Verizon's damages judgment.
The firm has steadily lost its value since.
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