Aug. 26 (Bloomberg) -- Vonage Holdings Corp. rose 36 percent in New York trading, completing its biggest three-day rally since going public in 2006, after the Internet-phone carrier submitted an application for Apple Inc.’s iPhone.

Vonage submitted the application this week, Natalie Kerris, a spokeswoman for Apple, said today in an interview. It hasn’t been approved yet because of a technical issue with the Vonage software, she said. The solution should be simple and relates to the labeling of an icon, said Charlie Sahner, a Vonage spokesman.

An application on a device as popular as the iPhone, which has sold almost 26.4 million units, may boost Vonage subscriber growth at Vonage and help revenue. The shares rebounded after plummeting to as low as 31 cents earlier this year from $17 at its initial public offering in May 2006.

“It would be significant because the iPhone is just growing so much and the extra revenue might be a big deal to Vonage, iPhone so that’s why the stock really shot up,” said Giri Cherukuri, head trader at Oakbrook Investments LLC in Lisle, Illinois.

Vonage advanced 58 cents to $2.17 at 4 p.m. in New York Stock Exchange composite trading, and has climbed almost fivefold this week. The stock continued to rise in late trading after markets closed, increasing 6 percent to $2.30 at 6:13 p.m. More than 81 million shares changed hands today, 63 times the daily average of the past six months.

Subscriber Defections

Vonage said sales fell 3.3 percent to $220 million last quarter after 89,000 subscribers defected. The Holmdel, New Jersey-based company has lost about 100,000 customers in the past year as subscribers opted for discounted digital-phone service offered by cable-television companies.

Vonage had been at risk of being delisted from the New York Stock Exchange, which requires stocks to have a price of $1 or more. Before this week, the company had traded under $1 since Dec. 19.

Less than 5.1 percent of Vonage shares available for public traded were sold short as of Aug. 14, according to data compiled by U.S. exchanges and Bloomberg. Were it in the Standard & Poor’s 500 Index, it would be the 175th most-shorted.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: August 26, 2009 21:22 EDT