Those numbers show, in addition to the regularly declining confidence that Gemstar is a Gorilla, that for the first
time the vast majority does not conclude that Gemstar is a Gorilla
I believe it was in the book "7 Habits of Highly effective People" that presented an exercise to show how difficult it is to form a conclusion without subconscious influences. A group of people was told that they would be seeing two images. They were then separated into two subgroups. The first picture was shown for about 20 seconds. Group A was shown a line drawing of an old woman while Group B was shown a line drawing of a young woman. The second picture was also a line drawing, but it was ambiguous. Depending on how you looked at it you could see either a young woman or an old woman. Both groups were shown this same drawing, and they could look at it and study it for as long as they wished. They were then asked to describe what they saw. Almost everyone in Group A saw an old woman in the 2nd drawing while almost everyone in Group B saw a young woman in the 2nd drawing. Even after they were told that this 2nd drawing was ambiguous, and that both a young and an old woman could be seen most people could still only see the woman they had originally seen.
The point of the exercise was to show that if a 20 second glance at a drawing could so effect one's opinion on what they were subsequently seeing, how much effect do much larger outside influences color our perceptions.
I mention this because while it is interesting to note that the perceptions of Gemstar's gorillaness have changed, the larger question is, of course, why. Have fundamentals changed, have analysis grown more rigorous, have factors become clearer. What's really changed to effect Gemstar's gorillaness or lack thereof. Here are a few things that changed over the time periods in question:
- Gemstar and Motorola announced a Long-Term Licensing Agreement and the settlement of their arbitration and litigation. (10/00)
- Gemstar takes over TV Guide, the top-selling weekly magazine in America, the scrolling TV Guide cable channel, and their ties to advertisers and TV-loving consumers. They also eliminates their biggest rival. As one article put it: "What's making Yuen so popular in the investment community is the realization that he will soon control one of the most important pieces of real estate on Planet Earth: American television screens. Thanks to his purchase of TV Guide, he owns virtually all the patents for interactive program guides, or IPGs." Another reporter saw it this way: "A Pasadena company cemented a deal Wednesday that gives it a near-monopoly over critical technology for interactive TV program guides that could be worth billions of dollars..." (7/00)
- Time Warner's merged with AOL appears to be happening. AOL is a GMST partner while Time Warner was an opponent. The merger will likely benefit GMST.
- Gemstar and Thomson Multimedia announced that they have entered into a long-term agreement to jointly pursue opportunities in interactive televisions (1/00)
tekboy prepared an interesting post last July summing up the gorilla status:
"1. Gemstar has proprietary rights to basic electronic and interactive program guide (EPG and IPG) technology--not
dissimilar, in certain respects, to Qualcomm's patent on (in carpetologist-speak) that hand-off thingummy.
2. Gemstar's program guide technology is and will continue to be the industry standard for advanced television sets,
set-top boxes, future interactive television, computer/tv convergence, and so forth.
3. Some of those markets exist and are growing rapidly, others are in embryo. Unless something totally bizarre and
entirely unforeseeable happens, the EPG market will be declared in tornado soon, with the IPG and other stuff
going into tornado down the road.
4. In addition to the above facts, which make it all but certain that Gemstar will be the gorilla of EPG/IPG in the
not-too-distant future, it has distinct godzilla potential thanks to the possibility of using its programming guides as a
platform for general and eventually targeted advertising.
5. All this should be obvious to anyone who looks into the subject..."
It might appear from the above that the gorillaness of GMST would have been enhanced over the past year rather than having grown more remote. However, a look at the stock price might tell a different story. Before the first poll the stock had moved from the mid $20 range to the $70 range, a nice triple. It continued up for a while, breaking $100 but had just fallen back to the 30's before the second poll, and the stock has largely languished since then. One has to wonder if the movement of the stock effects the analysis of the company. Is it easier to see the gorilla/king potential of a GMST or a CREE or a SNDK or a WIND when the stock is moving up than when it is moving down? And if such a bias exists might it lead us to tend to buy stocks at times when they are expensive rather then when they are cheep? GMST, the gorilla at $100 might seem a better buy than GMST the pebble at $40. Is it?
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