The deal gives Time Warner the ability to implement Gemstar's interactive programming guide throughout its digital subscriber base. The TV Guide IPG, which helps users to more efficiently sift through hundreds of TV channels, is expected to be Gemstar's main driver of growth.
Gemstar already has deals with Comcast
The controversy-embroiled company has suffered from the obnoxious activity of its now-former CEO Henry Yuen, which Bill Mann described this past March. But as the stock fell from over $100 a share in March 2000 to near $2.50 last September, the stock has gotten some attention in value circles.
Fair value estimates for the non-IPG assets of the company range from $4 to $7 per share. These assets include TV Guide magazine, TV Guide channel, and VCR+. At a tuck over $5 per share today, Gemstar leaves plenty of upside for the IPG to deliver.
The deal with Time Warner now gives Gemstar access to the top three cable operators. While the terms of the deal remain unannounced, this is certainly positive news in the face of the all the negativity.
Shares of Gemstar-TV Guide are up over 8% to $5.22 in early afternoon trading.
Jeff Hwang can be reached at JHwang@fool.com.
More from The Motley Fool
Just How Big a Social Security Hit Do Early Retirees Take?
Find out the two ways that early retirement affects your benefits.
How Do Government Shutdowns Affect the Stock Market?
Here's how stocks performed during three major government shutdowns in 1995, 1996, and 2013.
Here's Where Things Went Wrong for Nike, Inc. in 2017
Nike's stock didn't have a bad year, but there are some operational challenges starting to show up for the company.