Battle Tested TiVo (TIVO) Patent Sets Stage for M&A as Smart TV Wars Loom

September 24, 2012 3:31 PM EDT
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Price: $11.34 --0%

Rating Summary:
    12 Buy, 15 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 22 | Down: 34 | New: 34
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This morning TiVo Inc (Nasdaq: TIVO) announced it settled patent litigation with Verizon Communications (NYSE: VZ). The settlement totals $250.4 and sets the stage for a number of interesting developments related to TiVo’s pending lawsuits with Google’s (Nasdaq: GOOG) Motorala, Time Warner Cable (NYSE: TWC), and Cisco (Nasdaq: CSCO).

Analysts at Janney said, beside the Google, they believe the likelihood of settlement is generally lower in these cases based on the higher stakes (estimated at $1 to $2 billion in aggregate). They also said they believe it is increasingly difficult for TiVo defendants to hope for favorable rulings given the growing number of legal precedents to date.

TIVO patents have been battle tested for over 7 years and seen by every Federal judge, and most have ruled in TIVO’s favor, said analyst Tony Wible. The patent has survived three Patent Office reviews and has secured settlements with large operators - VZ, AT&T (NYSE: T) , and Dish Network (Nasdaq: DISH).

Wible also thinks the TiVo patent could be a key element in the looming Smart TV battle and may set the company up as a M&A target.

Janney has a Buy rating on TiVo. Today they increased their fair value estimate to $14.50

For an analyst ratings summary and ratings history on TiVo click here. For more ratings news on TiVo click here.

Shares of TiVo closed at $9.56 yesterday.

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