Dish Network's Stock Unfazed By Analyst Warning

Washington, D.C. (June 9, 2008) -- Dish Network's stock has remained steady despite a Wall Street analyst's report last week suggesting the satcaster could lose billions of dollars over its DVR patent dispute with TiVo.

Craig Moffett, an analyst with Sanford Bernstein, issued a research note last Tuesday saying that investors are overlooking the potential damages of Dish's battle with TiVo

However, shares of Dish Network finished at 35.13 on Friday, almost identical to what it was trading for at the opening of last Tuesday's session (35.28) shortly before Moffett's report was released. (TiVo's stock fell 12 percent last week after a report that Dish was counter-suing the company.)

Dish's stock did lose three percent on Tuesday after the Moffett report, but the stock quickly regained that on Wednesday. The marginal impact of Moffett's report suggests that investors are still doubtful that Dish's legal battle with TiVo will create long-term problems for the satcaster.

TiVo sued Dish Network in 2004 for DVR patent infringement and a Texas jury in April 2006 found in TiVo's favor. (The lawsuit affects both SD and HD DVRs.)

The verdict has since been tied up in appeals court, but TiVo claims that Dish Network now owes it approximately $100 million in damages. Additionally, TiVo says Dish must disable all current HD and SD DVRs because of the patent infringement.

Dish filed suit this month in a Delaware court seeking to prove that its new DVR software does not infringe TiVo's patents. But the Texas court has scheduled a September 4 hearing on TiVo's call for a contempt citation against the satcaster.

“If Dish loses a current round of contempt litigation related to their alleged ‘work around,’ then the costs to Dish of disabling DVRs, settling with TiVo, or—worst of all—potentially engaging in a bidding war for the right to continue offering DVRs at all, could be in a worst case scenario in the billions… far higher than currently contemplated,” Moffett wrote in his research report.

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