Only a few weeks after losing its patent infringement case to Sprint Nextel
The settlement cleared away all the likely appeals that would have drawn out the original verdict, and also freed Vonage from the 5% future royalty the jury had awarded Sprint Nextel. The elimination of the royalty that would have taxed Vonage's revenue electrified its stock, which ended the day up a whopping 123%, a level higher even than prior to the original court judgment.
The settlement makes it more likely that Vonage will be around for a while longer to push ahead with its plan to cut expenses and achieve profitability. The company made a dramatic shift in direction earlier this year by booting the CEO and slashing its marketing budget.
But while Vonage has had its attention elsewhere, cable companies such as Comcast
So while the market breathed a huge sigh of relief at Vonage's newfound viability, this cat has bounced a number of times already and doesn't have many of its nine lives left. The impact of Verizon's and several other lawsuits still hang over the company, and recent metrics show that the company's business plan is ineffective. Regardless of the events, Vonage is still a speculator's toy -- not an investment in the future of telephony services.
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