Vonage Surges 71% on Verizon Patent Settlement

Vonage announced Thursday it has settled its patent dispute with Verizon. Under the terms of the settlement, Vonage will pay a maximum of $117.5 million to Verizon. The actual amount Verizon will receive depends on how the Court of Appeals decides on Vonage's pending petitions associated with two of Verizon's patents. If Vonage is able to win either of the rehearings, it will pay $80 million; if it loses both, it will pay the full $117.5 million. "We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers," said Sharon O'Leary, Vonage Chief Legal Officer. "This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers." Shares of Vonage surged 71.2% to $2.62 in extended trading Thursday following the announcement.

Sources: Press release
Commentary: Vonage Jumps 123% on Sprint Patent Suit Settlement • Citi Sees 40% Chance Vonage Still Goes Bankrupt
Stocks to watch: VG, VZ. Competitors: S, T. ETFs: WMH, VOX
Earnings call transcript: Verizon Q2 2007

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