Vonage's immediate future: debt re-fi, more patent trolls
![zd-defaultauthor-russell-shaw.jpg](https://www.zdnet.com/a/img/resize/aab0ecb7fa6229ddd570d9e60960c37cdb96c2ed/2014/12/04/3c90fefa-7b70-11e4-9a74-d4ae52e95e57/zd-defaultauthor-russell-shaw.jpg?auto=webp&fit=crop&frame=1&height=192&width=192)
Our own Larry Dignan has been looking at Vonage's year-end financial report, and points out Vonage's debt issues.
Noting Vonage's patent infringement settlement payments for more than $200 million for the year, Larry notes that:
To wit: Vonage had $190 million in cash, marketable securities and restricted cash as of Dec. 31. A year ago, Vonage had $508 million on that same basis. Forking over more than $200 million in settlements hurts–especially when you lose 3 percent of your subscriber lines each quarter. Vonage ended 2007 with 2.6 million lines total.
However, Vonage isn’t out of the woods by any stretch. The company disclosed it has $253 million in convertible debt, which can be cashed in at the end of 2008. That math doesn’t quite work since Vonage only has $190 million at its disposal–actually $151 million excluding restricted cash.
Vonage is pursuing a re-fi, but although they are a company and not a homeower, these are not exactly the best times for that. And when you owe more money than you hold in assets, lenders of any stripe are likely to drive a hard bargain.
And, what about the patent trolls? They may be looking at Vonage as a company that will settle to make these disputes go away.