I clipped this off the AOL Motley Fool thread from aug. 30th. While it's a little dated I thought it provided some insight (confirmation) from a reliable source as to what's been behind some of the recent movement. Very encouraging...could this finally be some real exposure?
NEW YORK -(Dow Jones)- Gemstar International Group Ltd.'s shares rose
4% in heavy trading Thursday, following an 18% climb Wednesday, as
investors anxiously awaited a patent-dispute settlement and witnessed
the broad-based rollout of the company's TV Guide Plus interactive
program guide.
The Pasadena, Calif., company's shares (GMSTF) closed at $20.938, up
81.3 cents, on Nasdaq volume of 1.7 million, compared with average daily
volume of 205,200.
The company markets the VCR Plus instant programming system that lets
viewers program television shows for taping using codes printed in TV
listings.
Analyst Joseph Arsenio of Hambrecht & Quist Inc. said Gemstar is in
arbitration over the use of Gemstar's interactive program guide
technology in General Instrument Corp.'s (GIC) set-top boxes.
General Instrument develops technology products and services for the
interactive delivery of video, voice and data.
Gemstar claims General Instrument violated a licensing agreement
under which it agreed to develop and manufacture set-top boxes for
Gemstar's StarSight Telecast Inc. unit using StarSight technology. As
part of the pact, Gemstar said, General Instrument agreed not to use
StarSight's technology to build competing interactive program guide
products.
Gemstar is seeking a permanent injunction and damages in the
arbitration process, and Arsenio said investors are confident it will
succeed.
Arsenio pointed out that StarSight already scored a major victory in
April in a similar patent-infringement dispute against
Scientific-Atlanta Inc. (SFA).
The financially troubled StarSight had not pursued litigation against
General Instrument until StarSight was acquired by Gemstar in May.
Hungry investors are now anxiously awaiting word of a settlement.
"It's inevitable and will likely have a material and positive impact"
on Gemstar, Arsenio said. "The question is simply when."
Another analyst, Kian Ghazi of Lehman Brothers Inc., concurs a
settlement, when reached, would move the company's stock.
Discussions are also underway with Microsoft Corp. (MSFT) to revise a
licensing agreement that was signed with StarSight before Gemstar's
takeover. But Lehman Brothers analyst Ghazi cautions that Gemstar is
likely treading cautiously in the talks to ensure no bridges are burned.
"It's much better to keep a huge company like Microsoft as an ally -
not an adversary," Ghazi said, and for that reason, "I'm not sure how
aggressive Gemstar has been."
Hambrecht & Quist's Arsenio speculated that news earlier this week
that Thomson Electronics had begun national retail distribution of RCA
and Proscan television sets equipped with Gemstar's TV Guide Plus
interactive program guide catapulted Gemstar back into the investor
spotlight.
Although the technology has been available in certain models of JVC
and Philips Magnavox TVs since last Fall, Arsenio said its exposure was
limited and the Thomson rollout, with its nationwide distribution, has
prompted market watchers to revisit the stock.
Arsenio added that Gemstar has licensing agreements with a number of
other electronics companies, and they may be prompted by the Thomson
rollout to implement these agreements. |
