Gemstar Woes: ITC Delays Decision
By Multi Channel News Staff -- Multichannel News, 3/20/2002 8:00:00 AM
Shares in Gemstar-TV Guide plunged Tuesday after the International Trade Commission said an initial determination in Gemstar's patent dispute with EchoStar, Scientific-Atlanta and Pioneer has been pushed until June 21.
Salomon Smith Barney analyst Niraj Gupta downgraded Gemstar from a 'buy' to an 'outperform,' based on CEO Henry Yuen's conservative guidance to analysts during Monday's fourth-quarter earnings call.
Gemstar dropped its 12-month price target to from $32 to $24 per share. But Banc of America analyst Mike Benevento reiterated his buy rating with a $38 target, arguing that weakness presents a buying opportunity.
The ITC's delay is at least a short-term blow to Gemstar, which had hoped a positive ruling would help it win separate federal infringement suits it's waging against EchoStar, Pioneer and S-A.
An ITC delay also allows Time Warner Cable, Cox and Cablevision to watch Yuen sweat it out from the sidelines, and wait for an ITC ruling before they cut long-term deals with the TV Guide Interactive vendor.
The commission has 45 days to respond to the ITC judge's determination, so the outcome may not be known until Sept. 23, ITC spokeswoman Peg O'Loughlin said.
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