Legal victory pays off for Gemstar shares
EmptyNEW YORK -- Shares of Gemstar-TV Guide International Inc. were the second-biggest gainer on The Hollywood Reporter's Showbiz 50 stock index Tuesday after an analyst upgrade following a legal win Monday.
The stock of the interactive program guide maker rose as high as $3.94 before closing up 5.8% at $3.86.
The stock has traded between $2.59-$4.11 during the past year.
Soleil Securities Group analyst Marla Backer on Tuesday upgraded shares of Gemstar from "hold" to "buy" with a $5.50 price target. That suggested more than 50% upside from the stock's Monday close at $3.65.
Backer cited a legal victory for Gemstar on Monday as a key reason behind her bullishness.
Gemstar on Monday announced a favorable ruling in its arbitration related to the termination of former CEO and chairman Henry Yuen.
Beyond a reimbursement of attorneys fees and interest, the company also won a judgment of about $93.6 million.
Yuen was not entitled to any portion of the about $30.9 million set aside by the company as restricted cash for payment to him in connection with his removal, regulators also ruled.
Analyst Backer said in a report Tuesday that this ruling "removes the last overhang from prior management" and should "enable investors to monitor the company going forward on the strength of its own developments to boost revenue, reduce expenses and grow profit and cash flow."
Federal regulators said last week that they soon will begin giving $83 million in cash and stock to shareholders of Gemstar who were harmed by a suspected scheme to inflate revenue to meet financial targets.
Paul Bond in Los Angeles contributed to this report