Stock Surges on Settlement

"Details are still being ironed out, but Vonage says it will likely pay AT&T $39 million over five years. "With litigation behind us, we are happy to refocus on our business," acting Chief Executive Jeffrey Citron said during the company's earnings call.

In a rare spurt of enthusiasm, investors pushed Vonage's battered stock nearly 14% higher, to $2.49 a share, after the report. The stock has recovered sharply from an all-time low of 96¢ reached Oct. 1, yet remains 85% below the $17 price of Vonage's initial public offering in May, 2006.

Overall, the company lost $161 million in its latest quarter, up from a $62 million loss in the same period last year. But excluding litigation-related royalty payments and restructuring charges, Vonage's operating loss narrowed to $1 million, down from $53 million in the third quarter of 2006. The company ended the quarter with 2.52 million customer phone lines, a net gain of 78,000. While well below the 204,000 added in the same period last year, that gain marked an improvement over the 56,000 lines Vonage added in the second quarter. "

http://www.businessweek.com/technology/content/nov2007/tc2007118_653950.htm?chan=top+news_top+news+index_businessweek+exclusives