Netflix, TiVo are Wednesday's Darlings of Wall Street

5:15 PM PST 01/04/2012 by Paul Bond
Jin Lee/Bloomberg/Getty Images

One company boasts of streaming 2 billion hours of content in three months; the other benefits from a settled legal dispute and its CEO infers more lawsuits could be forthcoming.

A couple of digital-entertainment stocks were stars on Wall Street on Wednesday, Jan. 4: Netflix shares leapt 11 percent and TiVo shares jumped 10 percent.

Netflix, up $8.21 to $80.45, rose after the company disclosed that it delivered more than 2 billion hours of streaming content in the fourth quarter.

After that disclosure, BTIG analyst Richard Greenfield wrote Wednesday that Netflix is the 15th most-watched TV “network” in the U.S., and that it “must be eating into traditional TV viewing time.”

As for TiVo, investors were reacting to Tuesday’s after-the-bell news that it settled a patent dispute with AT&T that will lead to DVR licensing payments of at least $215 million.

Speaking at an investment conference on Wednesday, TiVo CEO Tom Rogers didn’t dismiss the idea of suing more companies that are allegedly infringing its DVR patents. The company's scorecard thus far: it has one lawsuit pending against Verizon Communications, it beat Dish Network and settled with AT&T.

"We are on to continuing to enforce our intellectual property elsewhere,” Rogers said while responding to a question about what’s next for TiVo after it’s AT&T victory.

“Where we can’t reach commercial terms, we won’t hesitate to be as aggressive as we need to be,” Rogers said at Citi’s 22nd annual Global Entertainment Media & Telecommunications Conference in San Francisco.

Also Wednesday, Janney Capital Markets analyst Tony Wible reiterated his “fair value” of $18.50 on TiVo – the stock rose 90 cents to $9.82 on Wednesday – and predicted that TiVo will next sue Time Warner Cable and Cablevision Systems.

The AT&T settlement, Wible wrote, “sets another precedent for the patent portfolio that is at the heart of its Verizon case and highly likely to be used against TWC and Cablevision, which we suspect will soon face similar litigation.”

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