Vonage Shares Soar 76% on Sprint Deal

$80M patent settlement licenses tech, curtails rising legal costs
By Kevin Spak,  Newser Staff
Posted Oct 8, 2007 2:30 PM CDT
In a file photo passers-by walk past a Sprint Store in Boston, Wednesday, Dec. 15, 2004 . Sprint Nextel Corp. sent letters to about 1,000 subscribers June 29, saying the company's records showed they...   (Associated Press)
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(Newser) – Vonage shares saw their biggest-ever bump today, after the company announced it has settled its patent lawsuit with Sprint for $80 million. In addition to cutting its legal losses, Vonage gains a license to use the disputed tech. “It's good in that things could have gotten worse,” one analyst told Bloomberg. “But it's not entirely positive because of the financial obligations.”

Before the agreement, Sprint could have sought an order demanding Vonage cease using the patented technologies. Shares of Vonage, which went public last year, jumped $0.87 or 76%, while Sprint shares fell $0.50. It was Vonage’s second crippling patent lawsuit—Verizon won the other, to the tune of $58 million. Vonage has not turned a profit since its 2000 launch.