Gemstar-TV Guide International Inc. stock was hammered Thursday, reaching a
new 52-week low of $25.50 each before regaining some ground to close at $28.94,
down $1.63 per share.
The decline was the latest in what has been a freefall for Gemstar stock this
week. Since March 13, when it closed at $42.63, the stock has lost more than 32
percent of its value, or $13.69 per share.
Gemstar is normally a fairly volatile stock, but analysts were hard-pressed
to explain the decline, attributing it to investor fears concerning the
faltering advertising market or the general Wall Street downturn.
'There's nothing out there,' Janco Partners analyst Stacy Bingler Forbes
said. 'The market continues to slide, there may be some profit-taking going on
and I think the short position in Gemstar has built up a little bit. But there
are no events.'
Forbes said that although Gemstar does have some advertising exposure through
its TV Guide magazine division, that's not a business most investors focus on.
And while its interactive programming guide will have an advertising component,
that is still in its infancy.
Perhaps investors who bailed out of other interactive-television stocks when
they realized revenue and cash flow could be a long time coming are getting
equally impatient with Gemstar.
'It could be a matter of [Gemstar] getting hit a little bit later than
everybody else did,' Forbes said.
She added that there are still a lot of positives going forward for Gemstar,
but other future growth drivers -- like interactive advertising, electronic
books and its TV Games Network horse-racing channel -- have yet to hit their
'One of the things that continues to keep pressure on Gemstar is that a lot
of its future valuation is based on revenue streams that are yet unproven,'