TiVo Shares Dip 15% While Patent Dispute Remains Ongoing

Shares of TiVo fell 15% Tuesday to $9.60 as an appeals hearing in its ongoing patent dispute with Dish Network was on display again in a Washington courtroom.

TiVo is trying to convince a panel of judges that Dish remains in contempt of a lower court ruling that the satellite TV provider’s DVRs are infringing TiVo’s patents.

Dish has already paid TiVo millions of dollars and has tweaked the technology in its DVRs, but TiVo maintains it is owed more money or Dish should be made to disable its customers’ DVRs.

A Federal Circuit has agreed with TiVo but the matter is being revisited en banc, and some TiVo investors worried Tuesday that a few questions the judges were posing weren’t TiVo-friendly.

“While some of the questions facing TiVo would skew to Dish’s favor, the debate may be a decoy as the topics were neither procedural or novel,” said Tony Wible, an analyst with Janney Capital Markets. “Dish faced more scrutiny than TiVo from the judges; however, we maintain our 60% probability of a TIVO victory.”

If things go TiVo’s way, the stock could shoot to $19, Wible said in a research note.

Others who follow TiVo were a tad more bearish about what they heard from the judges Tuesday.

“The hearing tone was consistent with our view that the next likely legal development is a setback for TiVo,” said analyst Barton Crockett of Lazard Capital Markets.

If the nine judges that make up the en banc hearing decide in TiVo’s favor, the stock is worth $19.45. If not, it’s worth $6.28, Crockett figures.