Vonage CEO Steps Down Amid Legal Setbacks
Thursday, April 12th 2007, 9:25 am
By: News On 6
HOLMDEL, N.J. (AP) _ Vonage Holdings Corp. CEO Michael Snyder resigned Thursday as the troubled Internet phone company announced a restructuring plan that includes an unspecified number of jobs cuts.
The resignation of Snyder, 54, is effective immediately. Chairman Jeffrey A. Citron will act as interim chief executive as the company seeks his replacement.
Vonage shares rose 11 cents, or 3.7 percent, to $3.11 in premarket electronic trading Thursday, having closed a day at $3 on the New York Stock Exchange. Since hitting a high of $17.25 a year ago, the stock has steadily declined, recently hitting a new 52-week low of $2.88.
Vonage said it plans to reduce marketing costs by about $110 million, and forecast marketing spend of about $310 million in 2007. It will also lower general and administrative expenses by $30 million by consolidating operations and cutting jobs.
Separately, the company said it recorded $195 million in revenue for the quarter ended March 31, but is still finalizing its financial statements.
Earlier this month, Vonage was barred from signing up new customers as punishment for infringing on three patents held by Verizon Communications Inc. A temporary stay was issued until the court rules on an appeal.
The injunction came a month after a jury ruled against Vonage and awarded Verizon $58 million in compensation for Vonage's past use of the patents, plus future royalties for their continued use.