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DISH Stock Slammed After Audit Report, TiVo Setback

Discussion in 'General DISH™ Discussion' started by Chris Blount, Mar 11, 2005.

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  1. Chris Blount

    Chris Blount Creator of DBSTalk Staff Member Administrator DBSTalk Gold Club

    Jun 22, 2001
    EchoStar's stock was slammed during trading Thursday after a report surfaced concerning an inquiry into past accounting issues and news that it suffered a setback in its litigation with TiVo.
    The company's shares fell more than 6 percent to $28.72 during trading Thursday.

    With the accounting issue, Bloomberg reported that an internal investigation by EchoStar's audit committee was started after KPMG, the company's independent auditor, allegedly uncovered evidence of improper booking of transactions and other issues while scrutinizing the company's 2004 financials. Bloomberg also said the Securities and Exchange Commission has opened an inquiry into CEO Charles Ergen's role in EchoStar's accounting.

    EchoStar would not comment on the matter.

    With the internal investigation, the audit committee must present findings to Ergen, and KPMG must then decide whether EchoStar is addressing the issue or refuse to sign off on the company's accounts, Bloomberg reported.

    Craig Moffett of Bernstein Research said the accounting news came as a surprise. "Charlie Ergen is a well respected manager within the cable and satellite sector, regarded as a reliable steward for minority shareholders' interests in an industry of family-run companies," he said. "There have never previously been any concerns regarding the company's management or accounting."

    Tom Eagan of Oppenheimer and Co. said possible fallout from an accounting issue may delay the company's fourth quarter reporting. "A more serious impact would be any restatements to the company's cap ex payments (historical and future) as that would impact free cash flow, a key valuation metric for the stock," he said.

    But the issue should not impede the company's purchase of the VOOM/Rainbow 1 satellite and it shouldn't lead to Ergen losing control of the company, Eagan said.

    EchoStar reports results next week, on March 17.

    As for the TiVo litigation, the federal district court for the Eastern District of Texas denied motions from EchoStar to dismiss and transfer the DVR company's patent infringement case against the satellite TV company. In the case, TiVo alleged that EchoStar and certain subsidiaries are violating a key TiVo patent known as the "Time Warp" patent.

    As a result of the Court's rulings, the case will move forward in the Texas district court.

    http://www.skyreport.com (Used with permission)
  2. Anonymous

    Anonymous Legend

    Jun 19, 2004
    Doesn't the "Time Warp" patent patent the idea of watching something while you are still recording it with the ability to fast forward, pause, and rewind through what has been recorded so far? Isn't that a bit like the company that patented the concept of puting an encyclopedia on CD-ROM?


    I think I should patent serving a drink in a glass, I bet that isn't patented yet. If the court backs up TiVo's patent then that would set a president for me to sue restaurants.
  3. Darkman

    Darkman Hall Of Fame DBSTalk Gold Club

    Apr 16, 2002
    when stocks go down.. good opportunity to buy :)
  4. Capmeister

    Capmeister Large Hairless ApeCutting Edge: ECHELON '08

    Sep 16, 2003
    So how many shares of Enron did you pick up cheap? :)
  5. Cholly

    Cholly Old Guys Rule! DBSTalk Club

    Mar 22, 2004
    Regarding the TiVo suit -- what about Scientific Atlanta's DVR's? Aren't they infringing on TiVo as well? Seems as tho TiVo could have a field day, suing them and everyone else who has come up with pausing live TV, etc. (think TV tuner cards by ATI, Avermedia, Hauppauge, Leadtek, etc.)
  6. mainedish

    mainedish Hall Of Fame

    Mar 25, 2003
    What in the world is going on at Dish Network? Is Ergen just over his head?
  7. Mike Richardson

    Mike Richardson Banned User

    Jun 12, 2003
    Bloomberg TV was subsequently removed from DISH Network. j/k :lol:
  8. JBKing

    JBKing Hall Of Fame

    Mar 23, 2002
    6% share drop? Big deal! :confused:
  9. Darkman

    Darkman Hall Of Fame DBSTalk Gold Club

    Apr 16, 2002
    Enron is not DISH ;)

    ... and who was talking about me ... lol - i was just "generally" stating :p
  10. mainedish

    mainedish Hall Of Fame

    Mar 25, 2003

    Yeah. But look at what's happening . I would be concerned.
  11. Richard King

    Richard King Hall Of Fame

    Mar 25, 2002
  12. DonLandis

    DonLandis Hall Of Fame

    Dec 17, 2003
    The one thing that always bothered me about the TIVO time warp patent is that it is the same as the process used in Broadcast to time delay any live cast for censorship purposes. Decades ago we used tape machines with a record head and playback head that was 7 seconds apart for this purpose. Later hard drives were used and then along comes TIVO doing the same thing but was awarded a patent for the "USE" in a home time shift recording system for TV. I believe their patent must speak to what is referred to as a "USE patent" which is entirely different than a fundamental technology or even design improvement patent. If this is the case, then TIVO has a real, not frivolous legal claim against anyone using the "time warp" process in a "Home video DVR time shifting" technology.

    In this thread is was also stated about patenting a glass of water as a bit of humor. Well, the fact is that any new use of an existing technology has patent possibilities as long as one very important condition is met. In the 70's the patent laws were changed to protect against trade secrets and pidgeonholeing technology. This changed required that a patent must be applied for within one year of it's public disclosure or commercialization. This means that as long as an invention remains secret and is never commercialized, you can hold the invention and patent it any time. However, once you disclose it exists or offer it for sale then you have one year to apply for the patent or it becomes public domain. I'm not a patent attorney but I've been through several RI's and patents and the process. It still is uncertain to me if an inventor can make a claim to an invention prior to one year if he is keeping it secret. The spirit of the disclosure law was to prevent inventors from holding an invention off the market and still receive protection. In other words, if you invent something the government wants you to patent it and then gives you 17 years protection exclusivity. I believe TIVO probably has some legal claims on this as they have been awarded patent protection for the use of the public domain process of time delayed recordings for home video vis a vis the practice of skip ahead and instant replay in the home. Should be interesting how the courts will rule on this. I don't believe the TIVO patent, if upheld, will shut down all DVR mfg. but it may shut down the live buffer that so many also have in use. If this is removed, then the DVR will have no live buffer and only the ability to record a program for later playback after the complete recording is finished, as in, a VCR where you have to finish recording and then rewind the tape to play it.
    Worse, since all these DVR's are upgradable, keeping them connected to the satellite could allow E*, if they lose this case, to be forced by court order to shut down the 2 hour live buffer ( as in the 921)and that would prevent you from any "trick Play" shuch as skip ahead, watching on time delay and instant replay with their DVR's. Others may also do this as well in anticipation of being next on the hit list by TIVO after they win the first case. This case is in the courts because it has some legal merit. It's anyone's guess how it will turn out. The way I see it, TIVO has done everything they were required to do including defending their patent claim.
  13. Mike D-CO5

    Mike D-CO5 Hall Of Fame

    Mar 11, 2003
    I think that Dish would buy Tivo or use their software before they would take away the dvr features we all have learned to love. Dish settled with Gemstar/TVguide by adding the TV Guide channel and paid some money to settle the lawsuit. I see this going one of three ways:

    1) Charlie either winning the case because they will find that Dish uses different software to accomplish the same thing as Tivo's time warp software.
    2) Or Charlie will pay a fine to Tivo and then use Tivos software and then keep them going when Directv stops in 2007.
    3)Third way I see it coming out is Dish buying Tivo and then this makes all the problems go away.

    I don't see Dish stop using the dvr features we all love or they will lose all their customers to cable or Directv.
  14. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

    Apr 17, 2003
    Agreed. Once you have a DVR, there is no going back. Removing DVR service from millions of customers would not be a good thing.

  15. homer1

    homer1 Cool Member

    Dec 27, 2004
    I seen the tivo stock really got hammered last week also!
  16. BasicBlak

    BasicBlak Mentor

    Jan 25, 2005
    Ouch!!! :lol:
  17. BasicBlak

    BasicBlak Mentor

    Jan 25, 2005
    Buying TiVo or licensing authentic TiVo software for E* would be the way to go if it came down to it, I'd say. Why? Quite simply, because TiVo WORKS!!! During my run with D*, it was absolutely flawless. Can DishPVR say the same? Just ask your friendly, neighborhood 921/522 owner. Ahhh, the stories we could tell! :nono:
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