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Technology Stocks : Gemstar Intl (GMST)
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To: 100cfm who wrote (6324)3/2/2004 8:35:36 PM
From: Mike Buckley   of 6516
 
100,

Legal costs were 77M for 03. When all the dust settles that will be a nice chunk of cashflow to the bottom line.

Not all of that impacts cash. Up to $25 million of it will be made in stock as part of the settlement of the class-action suit.

There will be a minimum of $43 million in cash payments related to the settlement of the investor class action suit. The settlement allows the company to substitute up to half of the stock payment with up to $13 million in more cash. However, despite that the company got some of the bad news out of the way by recording the settlement on the 2003 income statement, the cash outflow won't be recorded until 2004.

And don't forget that the settlement "does not resolve the related shareholder derivative suits or the non-consolidated securities fraud cases pending against the Company." There could be more bad news related to legal expenses.

--Mike Buckley
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