Gemstar Stock Crashes 39%
As anticipated, Gemstar-TV Guide took a severe beating on the Street on Monday. The parent company of the TV Games Network lost 39% of its stock value on trading volume that six times higher than its 90-day average.More than 32.5 million Gemstar shares were traded and the price plunged from a closing price of $8.20 on June 21 to $5 per share. The stock hit a new low of $4.85 during the day.Gemstar's patents for the program guide had been the backbone of the company's value, according to analysts. The company had intended to supply the industry-wide standard for interactive program guides in cable television. Gemstar also owns TV Guide magazine and the TVG horse racing network and interactive wagering service."This decision will no doubt stall the national rollout of Gemstar's IPG," said Merrill Lynch analyst Jessica Reif Cohen in an investment report.Reif Cohen called the verdict a "significant setback" for Gemstar.The ruling has been a big win for EchoStar, one of the three companies accused by Gemstar of patent infringement. EchoStar stock gained more than $1 to $20.13 in pre-market trading. The other companies involved were Pioneer, Scientific Atlanta, and Samini-SCI, which were importing set-top cable boxes.Making matters worse, several financial publications have reported News Corp. head Rupert Murdoch's harsh criticisms of Gemstar founder and chief executive officer Henry Yuen, indicating that Murdoch may want a change at the top. Prior to the announcement of the verdict, Gemstar's stock rose 10 cents to $8.20, or 1.2%, indicating that the broad stock market had expected Gemstar to win the case.Gemstar's shares have fallen 79% in the past year.
by Eric Mitchell
Date Posted: 6/24/2002 10:02:03 AM
Last Updated: 6/25/2002 4:36:06 PM
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