NEW YORK (AP) -- Shares of Vonage Holdings Corp. took another beating Wednesday after a federal jury found that the embattled Internet phone company infringed on Sprint Nextel Corp. patents.
"The Sprint lawsuit verdict may be the final nail in the coffin for Vonage, whose business model has long appeared vulnerable to us," wrote Buckingham Research Group analyst Qaisar Hasan in a note to clients. He called the decision a potentially a fatal financial blow for the company, echoing the sentiment of other analysts.

Vonage was ordered to pay Sprint $69.5 million in damages for willfully infringing on six of its telecommunications patents. This was the second legal defeat for Vonage this year. In March, a jury found that it violated three patents held by Verizon Communications Inc. and awarded Verizon $58 million in damages and 5.5 percent royalties on future revenue.

Vonage has appealed the Verizon decision and said Tuesday it would seek to overturn the Sprint verdict as well -- though it added it would also begin developing ways to work around the patented technology.

Bear Stearns analyst Mike McCormack noted that the Verizon appeal is still pending and a decision could come "within weeks."

The analyst expects Vonage to focus on developing workarounds, which could take months, added it's likely that there will be some overlap with the solutions developed to address the Verizon patents.

The ruling, he added increases Vonage's risk of bankruptcy.

Shares of Vonage fell 40 cents, or 31 percent, to 90 cents in late morning trading. The stock hit as low as 89 cents earlier in the day. Vonage went public in May 2006. Its shares dropped almost 13 percent on their first day of trading and has continued to tumble since, losing investors hundreds of millions of dollars.