I used to have Vonage, I am glad that I no longer have Vonage, and though I do not particularly like their service, I do not take pleasure in their demise. That being said, Vonage is in some major financial trouble these days. In the third quarter of 2007, Vonage managed to make $22.5 million, but they owe $253.5 million as soon as December 2008, which at their pace, will never be paid back in time. Vonage is apparently trying to reorganize their financing so they can extend the deadline. In 2007 Vonage also laid off %10 of their payroll, cut back on advertising, and lost its CEO and three other top managers. If all of that isn’t bad enough, Verizon just won a patent lawsuit against Vonage valued at $120 million. $117.5 million will to Verizon and $2.5 million to charity.
I am sure they will not close their doors today, but it seems to me that they are only avoiding the obvious. For those of you that follow the stock market, Vonage held its IPO back in May of 2006. Their opening price was $17 per share, today their stock is worth $2.27. I was offered Vonage stock at the IPO price back then and boy am I glad I passed it up.
Bye Bye Vonage…It was swell, but the swelling has gone down.
Want more? I wrote a farewell rant about Vonage earlier this year… CHECK IT OUT