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TiVo Soars on Judgment Against EchoStar and Dish

Wednesday, 20 Apr 2011 | 5:44 PM ET

TiVo stock soared Wednesday, up a whopping 29.5 percent, on news that the U.S. Court of Appeals affirmed a finding of contempt and award of sanctions against Dish and EchoStar.

This is far from a done deal — Dish and Echostar say they will appeal to the US Supreme Court, but if this decision stands, TiVo could receive some $300 million in damages. That size award won't wipe out TiVo's $779 million in debt, as of the end of its fiscal year, but it is a substantial help.

After such a big jump, is TiVo still a buy? Janney Capital markets analyst Tony Wible says yes. He has a buy on the stock, and a $18 price target (what he calls a "fair value estimate").

Why? He says that TiVo's victory in this case should help push a settlement in its looming AT&T , Verizon and Microsoft cases. And JPMorgan Analyst Bridget Weishaar also released a note reiterating an Overweight on Tivo, saying it was a "generally positive" move.

Here's TIVo's full statement celebrating the victory:

"We are pleased that the United States Court of Appeals for the Federal Circuit sitting en banc affirmed the district court's finding of contempt and award of sanctions against EchoStar for failing to comply with the district court's injunction. This marks the second time that the district court's contempt ruling has been upheld by the Court of Appeals. We look forward to the permanent injunction against EchoStar and Dish Network finally being enforced with respect to the DVRs they must now disable. This ruling also paves the way for TiVo to receive substantial damages and contempt sanctions regarding the DVRs that EchoStar and Dish Network failed to disable. With respect to the remand of the infringement provision of the District's Courts order, we intend to pursue the most rapid path to resolution. We will continue our efforts to protect our intellectual property from further infringement by EchoStar and Dish Network."

Here's DISH and Echostar's statement:

"DISH Network and EchoStar are pleased that the Federal Circuit Court of Appeals has unanimously vacated the district court's contempt ruling regarding our software design around. We are disappointed, however, that the Federal Circuit in a 7-5 split decision has affirmed the district court's ruling on the disablement question. We intend to seek review of that part of the decision by the United States Supreme Court and seek a stay of the injunction while doing so. We also will be making a motion to dissolve the injunction based on Tivo's recent representations to the Patent and Trademark Office substantially limiting the scope of the claims at issue in this case. Existing DISH Network customers with DVRs are not immediately impacted by these recent developments. The disablement ruling covers only certain older generation MPEG2 DVRs. We have already upgraded many of these customers and, if we are unsuccessful in obtaining a stay, we will work as quickly as possible to upgrade the remaining customers to our current generation DVRs, as these are not at issue in the ruling."

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.