As of June 30, Vonage had $343.5 million in cash.  But some of that cash may be tied up because of the Verizon (NYSE:VZ) case, although we’ll have to double check on that.  The same could be said for some of the pending shareholder suits since this did nothing but free fall after the 2006 IPO.

The good news is that Vonage doesn’t carry any "Goodwill" on its balance sheet.  That’s good, because they’d have to change it to "Ill-Will."

Shares dropped over 7% to $1.81 before the stock was halted.  These royalty payments are being tallied up and likely aren’t yet finished.  This company needs to conserve cash in a serious way.  Otherwise its position as a going concern will become at issue.  At one point this case was rumored to be settled, but that obviously isn’t the case.

Dr. Pangloss might be happy that this gets one more case behind it.  But the company as a business is getting closer to being in a real bind.

Past articles relevant to today’s news:

• Vonage Files Its Annual Report; Risks, Legal Proceedings, & All
• Vonage Gets Some Hope (VG, CLWR)
• Vonage’s "Patent Workaround"

Jon C. Ogg
September 25, 2007