DISH Buying TIVO?

[harshness]

The CEO's primary duty is to maximize shareholder wealth and increase the price of common stock.

Let's look at all of the insider trading traffic to see if we can gain some insights:

TIVO: TIVO INC Insider Transactions

Hmmm. The CEO has divested himself of $5 million in stock a couple of weeks ago and a Senior VP has unloaded over $3.5 million in the last few weeks. The CFO sold stock as did the General Counsel. Maybe March is a good time of year to rack up some capital gains and the stock isn't headed for $26 after all.

 

[harshness]

DISH must pay BIG now. Billions.

TiVo is worth something less than $1.8B on paper. Even if the poison pill is still in play, I can't imagine it would be "billions".

 

[ewindowman]

Good News!

 

[dangue]

Let's look at all of the insider trading traffic to see if we can gain some insights:

TIVO: TIVO INC Insider Transactions

Hmmm. The CEO has divested himself of $5 million in stock a couple of weeks ago and a Senior VP has unloaded over $3.5 million in the last few weeks. The CFO sold stock as did the General Counsel. Maybe March is a good time of year to rack up some capital gains and the stock isn't headed for $26 after all.

Quite simply, these insiders cannot just sell their stock like anyone else who happens to buy. Given their positions in the company they have a legal fiduciary duty to the stockholders. They can't trade based on any sort of insider information. But, at the same time, these people should still have some rights to sell stock. The solution that has been come up with is that they all document well in advance a stock sales plan. I don't know what the short end of it is, but sometimes these plans are multiyear in nature. The fact that these insiders all sold means that the plan to sell was from months ago. It would not happen or not happen based on recent developments.

 

[dvrexpander]

They read here.

doesn't make sense.. .if they read here then why do they continue to let their installers (The Face of Dish) get treated so bad by RSP's and other offices?? :rant:

 

[Scott Greczkowski]

doesn't make sense.. .if they read here then why do they continue to let their installers (The Face of Dish) get treated so bad by RSP's and other offices?? :rant:

Because the number of complaints in the installer forum is small compaired to the amount of people working for them.

Installers need to learn to stand together if they want to get anything done, but unfortunately most won't and that is why they are in the position they are in now.

Remember this portion of SatelliteGuys is for consumers. Installer issues should be posted to the Installer Zone as most consumers have no clue what your talking about here.

 

[Tyralak]

Hell no! Throw the TIVO software OUT!

And bury TIVO for good.

:up

 

[Tyralak]

i guess when you steal the technology, you need to buy the company. if dish buys it, i may have to ditch my tivo box....which i love.

Not necessarily. Tivo never bought Replay.

 

[Tyralak]

And exactly, why would TiVo want to be bought? They are on the verge of a huge licensing deal.

They don't HAVE to want it.

 

[Tyralak]

Yeah does not make sense. but at the same time I dont think directv would just lie down and let this happen with out there own bid .

They own Replay now. They probably don't give a rat's ass.

 

[dvrexpander]

Remember this portion of SatelliteGuys is for consumers. Installer issues should be posted to the Installer Zone as most consumers have no clue what your talking about here.

Your right... the only few that would are the ones that see me cursing at their tree outside their home.

As for the topic at hand, I really don't see this happening... makes no sense and too many regulations would go into effect.

 

[harshness]

The solution that has been come up with is that they all document well in advance a stock sales plan.

Take a look at some of the planned sell prices and the actual sell prices and tell me with a straight face that they were planned quarters in advance.

 

[TheForce]

TiVo is worth something less than $1.8B on paper. Even if the poison pill is still in play, I can't imagine it would be "billions".

Right-- I took a look see at the 8K filings and was shocked at how much financial trouble Tivo is in. Too many people are looking at the technicals of the company and not the financials isolating the legal PL center. eg. the revenue based on tivo subscriptions is only $187,000 and is expected to reduce to $148,000 this year. Their equipment operates at a MINUS 10% margin. Even their litigation proceeds is -83M. The company has basically never operated in the black and is headed for financial ruin in the near future.

Now looking at the recent number of Form 4 filings with the SEC, we show a large amount of stock by all the top guns at TIVO, essentially cashing out. Normally, when a company is rumored to be ready for purchase and a deal is being made, the stock jumps considerably. Yet I saw nothing on the radar to indicate this happening so far. The last major jump in TIVO happened based on the Judge ruling back in the first week of March. I think the reason the stock didn't move on the rumor of a dish buy out is because the insiders were selling off in big numbers to (suckers) who think they are buying into a good deal. Maybe so as the deal just may be a conversion to DishNetwork stock.

For Dish, is this a good thing? If Charlie says it is then I believe it is but from an outsider, I would think all he is getting is the shutdown of the legal battle and some 7 years left on the IP from TIVO. Their business itself is basically flawed compared to a company like SATS that is nicely profitable so sweeping changes would have to be made at TIVO to change their business model which is basically a loser.

 

[harshness]

The part that I find bewildering is how many people hailed the March ruling against DISH/SATS as a clear sign of ultimate victory for TiVo. It was most certainly not. It was simply a sign that the court wasn't going to be trifled with.

 

[TheForce]

I am pretty sure you can't buy/sell your own stock in anticipation of big news. There are specific rules and windows that you're allowed to do so.

That's true but if you read the Form 4's and examined the dates and prices being sold, each of the insiders filing did so for sales that take place after the stock rose back on March 8th due to the legal ruling announced that caused the stock to spike up from ~10 to ~16.75. The sale was at 16.75 or there abouts.

Them doing this did not show any illegal insider trade profiteering that was not available to anyone else on the open market.

What happened to their benefit is that the Tivo stock spiked, then has been stable at 16-17 since. I see absolutely no hanky panky insider trading being done here.

Now having said that, IF these insiders believe that the company is going to be bought out or go bankrupt soon, they may have made their decision to sell off while they believe the stock is peaking and will soon fall. They can retire in wealth and the buyers of their stock will soon be Dish Network stock holders. But, from what I see they didn't break any laws as the market price was manipulated upward by public information.

 

[whatchel1]

+1

That's true but if you read the Form 4's and examined the dates and prices being sold, each of the insiders filing did so for sales that take place after the stock rose back on March 8th due to the legal ruling announced that caused the stock to spike up from ~10 to ~16.75. The sale was at 16.75 or there abouts.

Them doing this did not show any illegal insider trade profiteering that was not available to anyone else on the open market.

What happened to their benefit is that the Tivo stock spiked, then has been stable at 16-17 since. I see absolutely no hanky panky insider trading being done here.

Now having said that, IF these insiders believe that the company is going to be bought out or go bankrupt soon, they may have made their decision to sell off while they believe the stock is peaking and will soon fall. They can retire in wealth and the buyers of their stock will soon be Dish Network stock holders. But, from what I see they didn't break any laws as the market price was manipulated upward by public information.

:up I think this is a good evaluation of the TIVO market situation. Charlie may be able to get them at good deal due to this as well. With some $$$ and some stock trades to the investors. They have been bleeding red ink for a very long time. I don't watch the market but have read that w/ the exception of the recent rise that for the past 4 quarters they have incurred so much debt that it has been luck to stay alive.

 

[TheForce]

The part that I find bewildering is how many people hailed the March ruling against DISH/SATS as a clear sign of ultimate victory for TiVo. It was most certainly not. It was simply a sign that the court wasn't going to be trifled with.

Well, not surprised if your collection of people are just those here on satelliteguys, who tend to be more focused on the technicals, both stock move pattern and technology battles than they do the financials.

The reason the stock pushed up to where it landed was because of so many of these types decided to invest for a quick profit based on the momentum of the move. It's stable because the quality of investor that made this move are those who don't understand the market and are now long on the company. As I stated earlier, Tivo is NOT LONG for this world since their business model is flawed into negative territory. Production-wise they are a small half million$ product generator. for recent years their legal moves have been large but the net from those moves has also been in negative territory.

 

[TheForce]

I don't know. (And I don't own stock in eaither company) but Barrons is not really known for being rumor mongers.

Just catching up on this thread content--

Actually, you stand corrected as Barrons actually is spreading a rumor. Look at your article and see where the author claims he is just spreading a rumor he read on another newsletter- briefing.com. I went there and couldn't find anything. ????

 

[TheForce]

Because Tivo's business model is a failure. They've never made a profit from operations. And it is exceedingly unlikely they ever will. Their patent portfolio has some value, esp since the PTO seems determinedly brain dead.

It is, and always has been, about the money. They NEED to be bought out in order to come out in the black for their stockholders. Time is against them, especially if the patent wars continue.

Right! The patent portfolio for whatever that's worth, I believe, has only 7 years left

The hardware business is unprofitable at a 10% negative margin, but DishNetwork may be able to turn that around with proper management. However, I see a problem in DishNetwork doing that as TIVO would then be a direct product competitor of another company that Charlie has deep interest in- Echostar. The subscription business is predicted to be only $148,000 in 2010.

Which brings me to a point that I saw repeated over and over in this thread- People seem to be confused over the companies here. DishNetwork spun off it's mfg and equipment development business to a separate publicly traded company- Echostar (SATS) Charlie Ergen owns 10% in Echostar ( per 8K report )
The suggestion in this thread is that it would be OK for Sats to own TIVO rather than DishNetwork (DISH) While that may be a tidy move, there is a problem. Echostar doesn't have enough revenue to buy Tivo. Dish Network could do it with pocket change. Echostar would need to generate a huge debt to acquire TIVO or sell a huge amount of stock. This would hurt the SATS stock holders including Charlie's 10% of current value. There would be no advantage to either company, E* or T* in a SATS stock move buyout. I hope this makes sense but it's all about the money. Charlie Ergen owns 10% in Dish Network ( per 8K report )

Some have suggested Dish buy stock to take over without a sale agreement- aka hostile takeover. This would need to be done very slowly as to not drive up the stock price artificially high. Charlie is too smart to do that. No, he will give the stock holders a good deal and the owners can just walk away rich.

If there is no takeover, TIVO may win a nice legal settlement but the stock will spike and then tank as the cash cow is over and the company will be out of steam left with a money losing business model. In this scenario, after studying the TIVO annual report- I see only the lawyers making a profit.

 

[Roxor]

Right! The patent portfolio for whatever that's worth, I believe, has only 7 years left

The hardware business is unprofitable at a 10% negative margin, but DishNetwork may be able to turn that around with proper management. However, I see a problem in DishNetwork doing that as TIVO would then be a direct product competitor of another company that Charlie has deep interest in- Echostar. The subscription business is predicted to be only $148,000 in 2010.

Which brings me to a point that I saw repeated over and over in this thread- People seem to be confused over the companies here. DishNetwork spun off it's mfg and equipment development business to a separate publicly traded company- Echostar (SATS) Charlie Ergen owns 10% in Echostar ( per 8K report )
The suggestion in this thread is that it would be OK for Sats to own TIVO rather than DishNetwork (DISH) While that may be a tidy move, there is a problem. Echostar doesn't have enough revenue to buy Tivo. Dish Network could do it with pocket change. Echostar would need to generate a huge debt to acquire TIVO or sell a huge amount of stock. This would hurt the SATS stock holders including Charlie's 10% of current value. There would be no advantage to either company, E* or T* in a SATS stock move buyout. I hope this makes sense but it's all about the money. Charlie Ergen owns 10% in Dish Network ( per 8K report )

Some have suggested Dish buy stock to take over without a sale agreement- aka hostile takeover. This would need to be done very slowly as to not drive up the stock price artificially high. Charlie is too smart to do that. No, he will give the stock holders a good deal and the owners can just walk away rich.

If there is no takeover, TIVO may win a nice legal settlement but the stock will spike and then tank as the cash cow is over and the company will be out of steam left with a money losing business model. In this scenario, after studying the TIVO annual report- I see only the lawyers making a profit.

Charlie had about 539,000 shares of Dish stock and Jim has almost 6,000,000 as of the last reporting dates of record. I don't know where you got those 10% figures of ownership, but I would guess the real numbers are much, much higher, or Charlie would not be one of the richest persons in the world. I would imagine Jim is not far behind. Dish took in almost $11.6B last year in revenue and had gross profits of almost $3.3B. The common shareholders got about $636M. Echostar had revenues of $1.9B and a gross profit $433M. Echostar shareholders got $365M.