Vonage's just-announced escrow, bond payments may have a temporary calming effect
In looking at Vonage's stock performance today, it has appeared that investors' anxious nerves have been palliated by two decisions Vonage announced today. This morning, Vonage said it would put into escrow a quarterly royalty of 5.
This morning, Vonage said it would put into escrow a quarterly royalty of 5.5% throughout the Verizon patent infringement appeals process. The money would be payable to Verizon if Vonage loses its appeal.
Vonage also noted that in compliance with the U.S. District Court, it will post a $66 million bond as payment to Verizon.
With today's Vonage stock prices coming back from early morning, sub-$3-a-share lows to around the $3 a share levels news of these payments, as well as their scope, now seem to have been factored in by Vonage investors as the biggest likely news about Vonage for at least the next couple of weeks.
That plays out in a scenario where Vonage is once again in denial about their flawed business model, their loyal investors stick with their holdings, and the nervous ones buy and sell with every little fluctuation.
The next price fluctuation won't happen until and if the injunction against Vonage signing up any new customers gets brought back to life. But I personally don't think that's going to happen until final resolution of the broader patent infringement claims.