Vonage 3Q Loss Widens On Charge Linked To Rally

HOLMDEL, N.J. (AP) — Vonage Holdings Inc. posted a much wider loss for the third quarter on Wednesday, ironically attributing the gap to its stock rally late in the period. The Internet phone service provider said adjusted results produced its second consecutive quarterly profit, but the stock nevertheless dropped sharply in morning trading.

Vonage posted a net loss of $54.6 million, or 33 cents per share, compared with a year-ago loss of $7.8 million, or 5 cents per share.

Most of the drop reflects a $63 million charge resulting from the sharp rise in the price of Vonage's stock during the quarter.

The stock closed Sept. 30 at $1.39, more than triple its starting point of 38 cents. At its height, shares traded nearly seven times higher than at the beginning of the quarter.

The spike came in late August, around the time Google Inc. announced its new voice application. Market observers suggested that helped generate new interest in the voice-over-Internet-protocol technology pioneered by Vonage, and possibly set the company up for a buyout. Vonage also launched its World service, which offers international calling for a flat rate, in mid-August, and a smartphone mobile application on Sept. 1.