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Wall Street Eyes TiVo Verdict

Discussion in 'General DISH™ Discussion' started by Nick, Apr 17, 2006.

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  1. Nick

    Nick Retired, part-time PITA DBSTalk Club

    Apr 23, 2002
    "The downgrade "reflects our view of the
    surprisingly adverse, and swift jury verdict..."

    Investor Reaction to DISH/TiVo Case

    Given that the markets were closed Friday due to the Good Friday holiday, it was
    difficult gauging investor reaction to the patent infringement case involving EchoStar
    and TiVo.

    Today could be a different matter, however, when the Street looks at the litigation
    win for TiVo, which convinced a federal jury in Texas that the satellite TV company
    infringed on its patented technology.

    S&P wasted no time airing its opinion, downgrading EchoStar in a research note
    released Friday. S&P's Tuna Amobi said the EchoStar downgrade "reflects our
    view of the surprisingly adverse, and swift jury verdict on the DVR patent suit."

    Amobi added, "While the $73 million award is unlikely to hurt EchoStar's long-term
    finances, and a likely appeal could span years, we see possibly higher financial
    exposure on the court's unqualified finding of willful patent infringement."

    While the $73 million penalty is a big deal for some, others are eyeing TiVo's planned
    request for a permanent injunction that could impact EchoStar's DVR service.

    "EchoStar has to be more concerned about a possible injunction and ultimately being
    forced into a licensing deal," said Ladenburg Thalmann analyst William Kidd.
    "EchoStar is trying to avoid licensing TiVo's technology on an on-going basis through
    a variety of processes, including an appeal, a separate suit of its own, as well as
    through a re-examination at the U.S. patent office that EchoStar hopes could invalidate
    TiVo's patents. These processes could take years to resolve.

    "However, TiVo intends to seek an immediate injunction on EchoStar DVR sales, which
    could force EchoStar into an immediate agreement, if the judge agrees to act before
    EchoStar's appeal is decided. A licensing agreement would be an obvious but
    manageable negative," Kidd added, saying he thinks a licensing fee could be largely
    offset by incremental DVR fees.

    www.SkyReport.com - used with permission
  2. BillJ

    BillJ Icon

    May 5, 2005
    Thanks for posting this article. Court decision hasn't hurt E* stock today. It traded down a little this morning but was up 12 cents a few minutes ago. Doubtful the judge will ban DVRs during the appeal process. My guess is either the decision gets overturned in the next couple years or TIVO and DISH reach a licensing agreement.
  3. Nick

    Nick Retired, part-time PITA DBSTalk Club

    Apr 23, 2002
    On the first trading day after TiVo won a jury decision in
    its patent infringement case against EchoStar, shares in
    the DVR pioneer soared on Wall Street. And it appears
    investors shrugged off the lawsuit loss for the satellite
    TV company.

    Shares in TiVo climbed more than 7 percent in trading
    Monday, to $8.65. The closing represents a new 52-week
    high for the company.

    Meanwhile, EchoStar stock also closed up Monday,
    ending the day up seven cents to $30.04. The closing
    price was a bonus for the company given that market
    numbers were down for most of the day.

    Analysts also took note of the case. Wedbush Morgan
    upgraded shares in TiVo from "hold" to "buy."
    Nonetheless, Kaufman Bros. and Ferris Baker Watts
    downgraded the DVR company, each assigning the
    company's stock a "sell" rating.

    www.SkyReport.com - used with permission
  4. BillJ

    BillJ Icon

    May 5, 2005
    Re: TIVO Stock
    I'd take the money and run. The court decision has given life to slowly dying company, but that doesn't mean it will thrive.

    Long term my money is still on E* - literally. I own 200 shares. They have the deep pockets to battle this out and they have a lot going for them in the satellite wars as well.
  5. Rogueone

    Rogueone Hall Of Fame

    Jan 29, 2004
    so where does echo's deep pockets come from? I get that D* has deep pockets with the backing of Murdoch, but I had thought E* was a typical small public business with funds raised primarily thru investers. Does E* has some other sources one doesn't normally hear about in regular news coverage?
  6. LtMunst

    LtMunst Hall Of Fame

    Aug 24, 2005
    Lately the pockets have gotten deep from BIG profits.
  7. BillJ

    BillJ Icon

    May 5, 2005
    At the end of December E* had a market cap of $13 billion and over a billion in cash. Their return on capital is about 21%. Cash flow is good and growing. And then you have the big plus -- Charlie hates to lose!
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