Vonage considering sale?

James Middleton

April 18, 2007

1 Min Read
Vonage considering sale?

Despite a very real fear of disconnection and bankruptcy, shares were actually up at beleaguered VoIP firm Vonage on Tuesday night.

The reasons for the increase are less than clear cut but one of the more outlandish rumours is that Vonage is in discussions with a buyer and that buyer may be Sprint Nextel.

Shares in the firm were trading as high as $3.68 on Tuesday, before closing almost 1 per cent up at $3.31. Earlier in the day the company had filed its 10-K annual report, which did not make comfortable reading for shareholders, prompting wild speculation about the boost in share price.

Vonage has been well and truly on the ropes since being found guilty of infringing three broad reaching VoIP patents owned by Verizon. Vonage has admitted that it has no workaround for the technology and now faces being shut down.

Tuesday’s filing also outlines pending patent litigation filed by Sprint Nextel, also covering VoIP technology. The litigation is still in the “discovery phase” but it is understood the two companies have held talks and Vonage is considering selling itself to the operator.

The talk of acquisition may be the reason why Vonage’s share price is doing better but such rumours should be taken with a pinch of salt. Unless Sprint has the right to use Verizon’s disputed VoIP patents, then the Vonage network could still be shut down and with the firm on the verge of bankruptcy, it is difficult to see what other value it has.

Read the whole Vonage saga here.

About the Author(s)

James Middleton

James Middleton is managing editor of telecoms.com | Follow him @telecomsjames

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