Company's shares close up 8.11%
A slice of good news for troubled Gemstar-TV Guide jacked up the stock by nearly 14% on Tuesday as the News Corp.-controlled company announced a licensing and distribution agreement with Time Warner.
Shares rose as high as $5.48. They closed up 8.11% at $5.20.
The once high-flying stock has traded as low as $2.50 this year, buffeted by federal investigations, accounting issues, exec turmoil and questions about the company’s business model and strategy. Gemstar publishes TV Guide mag and licenses television programming guides and other technology. Historically, the company has been notoriously litigious in protecting its patents and copyrights — a tendency that backfired over the last couple of years as the company lost some high-profile cases.
Gemstar needs friends and it needs to send a message that its electronic guide biz is still lively. The deal with Time Warner may do both. It calls for Time Warner Cable to use Pasadena, Calif.-based Gemstar’s proprietary technology, brand and content on electronic program guides for Time Warner digital subs. It’s an unusually flexible deal for Time Warner: Agreement allows the media giant to use Gemstar’s product directly or to incorporate the technology and content into Time Warner Cable’s own guides or into guides provided to Time Warner by third-party vendors.
“I believe that this agreement with Time Warner Cable represents a crucial step for us in our quest to become the leader in television guidance across all platforms,” said Gemstar CEO Jeff Shell.