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What: Shares of TiVo (NASDAQ: TIVO ) got crushed today, down by 19% at the low, after the company settled an ongoing patent suit with several tech companies.
So what: Google and Cisco Systems will pay TiVo a lump sum of $490 million to settle the litigation, and TiVo has entered into licensing agreements with Google, Cisco, and Arris. Following the settlement, TiVo will use the funds to increase the company's stock repurchase authorization, doubling it to $200 million and extending it through August 2015.
Now what: All pending litigation has now been dismissed as part of the settlement. TiVo now expects lower litigation costs for the current fiscal year. The sum is less than investors were hoping for, as many were expecting Google's portion alone to be in the neighborhood of $500 million, in addition to another payment from Cisco. TiVo also received downgrades from Barclays and Janney Montgomery Scott following the announcement.
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