Davis Freeberg

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    • Macrovision Upgraded to Buy, Shares Jump
      The problem with them buying Gemstar is that the real value is embedded in Gemstar's years of tax losses. Assuming that the merger goes through, it will be very difficult to spin off these assets for at least two years without invalidating the tax benefits from Gemstar's losses. I suppose that there is always the chance that the merger doesn't go through, but to make a bet that they are going to start spinning off businesses seems pretty foolish given the comments that Macrovision has made regarding the Gemstar purchase.
      Jan 10 13:41 pm |Rating: 0 0 |Link to Comment |View article
    • Gemstar-TV Guide International: Exponential Growth Ahead
      I'm not sure that I buy into this. I look at GMST's numbers and compared to their competitors their valuation looks pretty rich. You did a good job of focusing on the highlights, but don't mention their problems with the VCR+ technology. Already, Dish was able to force the company to drop their guide data patent claims by bringing an anti-trust suit against them and recently Moxi has also filed suit. If they can replace their VCR+ royalties with DVR royalties than they should make a smooth transition, but at a $2 billion market cap, what is really the upside, even if they are able to maintain their licensing relationships.

      The company does have some tax losses that would be nice for a potential acquirer, but I'm not sure that I'd want to make this type of bet when the risk/reward seems so off balance to me. If they had really amazing technology or some kind of a lock on the television advertising space, I could see paying four times sales for the company, but without any decent barriers to entry, this one looks lofty, even though it's basically been dead in the water for the last five years.
      Jul 05 12:12 pm |Rating: 0 0 |Link to Comment |View article

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