TiVo Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of TiVo (Nasdaq: TIVO  ) briefly rose more than 10% in intraday trading today after the company announced a $500 million settlement of its patent dispute with DISH Network (Nasdaq: DISH  ) and EchoStar (Nasdaq: SATS  ) .

So what: Under the terms of the agreement, TiVo will get $300 million immediately and $200 million more in six payments spread out between 2012 and 2017.

Now what: Interestingly, investors don't see the deal as adding $500 million in new value. TiVo trades for $1.18 billion in market value as of this writing, up $80 million for the day. The implication? TiVo's underlying business is too damaged to make the stock a long-term buy. Maybe, but I'm siding with Citadel on this. Seeing Dish open its wallet could scare AT&T, Verizon, and others to follow suit.

Interested in more info on TiVo? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. AT&T is a Motley Fool Inside Value pick. You can try any of our Foolish newsletter services free for 30 days.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Check out his portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is at least 10% better than other disclosure policies.


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