=TiVo Down On Reports DirecTV Sold Stake In Co. -2-
Dow Jones Equity News, Tuesday, June 08, 2004 at 11:40
DirecTV is owned by Rupert Murdoch's News Corp. (NWS), which also controls set-top box maker NDS Group PLC (NNDS). NDS has been working to introduce its own digital video recorder technology, possibly through DirecTV or cable operators. NDS's offering would compete directly with TiVo's own recorder."While we expected some of DirecTV's business to go to Murdoch-controlled NDS over time, we had always assumed TiVo would maintain a close working relationship with DirecTV,"said Adams Harkness&Hill's Frankel."The best-case interpretation of these events is that DirecTV wants some impartiality (although that seems inconsistent with Murdoch's ownership stake in NDS.) More likely this signals that DirecTV is looking to pull away from TiVo."The potential loss of DirecTV as a partner would be a critical blow to the company."We are highly dependent on our relationship with DirecTV for subscription growth,"the company said in its annual 10-K filing with the Securities and Exchange Commission.
In the first quarter, TiVo added 196,000 new users through DirecTV. In comparison, the company added 68,000 new users under its standalone TiVo-branded product.
DirecTV accounts for about 55% of TiVo's subscriber base, Frankel noted.
The analyst doesn't own a stake in TiVo, but Adams Harkness&Hill is seeking an investment banking relationship.
William Blair's Farina pointed to DirecTV's sale of its stake in the Hughes business and DirecTV's recent sale of its 19 million-share stake in XM Satellite Radio Holdings Inc. (XMSR) as proof the TiVo sale isn't an isolated event.
The analyst maintains an outperform rating on the stock.
Farina or members of his immediate family own a stake in TiVO, and William Blair has an investment banking relationship with the company. The firm also owns 1% or more in the company's stock.
-By Roger Cheng; Dow Jones Newswires; 201-938-5393; roger.cheng@dowjones.com
(END) Dow Jones Newswires
06-08-04 1140ET
SOURCE Dow Jones Equity News |
