Shares in Vonage Holdings Corp jumped 42 percent on Friday after it settled a patent dispute with Verizon Communications Inc, raising hopes the Internet-based calling company was emerging from legal troubles.
The shares rose 63 cents, or 41 percent, to $2.16 by early afternoon.
Vonage said on Thursday that the final terms of the settlement depend on whether a court of appeals grants a rehearing, but any payment will be capped at $32 million in addition to $88 million already held in escrow.
The company has been hit by a series of lawsuits since going public in May 2006. It said last week that it was sued by top U.S. phone company AT&T Inc, which accused it of selling packet-based telephony products using patented technology.
Vonage has been trying to settle the cases. Earlier this month, it settled a patent suit filed by Sprint Nextel Corp for $80 million.
The company's shares remain down 88 percent from their initial public offering price of $17. Analysts have said the Holmdel, New Jersey-based company faces growing competition from cable and other Internet companies.
(Reporting by Ritsuko Ando)