After the market close, Tivo announced that movie downloading service to view the downloaded movie via internet on TV set will be available for certain Tivo DVR subscribers on a trial basis. This service is expected to be widely deployed to 1.5 mil standalone Tivo subscribers sometime this year.
(http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070207:MTFH84910_2007-02-07_05-01-14_N06308517&type=comktNews&rpc=44)
After the market close, Cisco reported better than expected earning and cites digital downloading of the video as a huge catalyst for the future growth of the company. Tivo has been the poor performer when it comes to investment return for its shareholders. The stock has been a good candidate for trading opportunities as the stock gyrated from $5 to $8 several times last two years.
Today, Tivo is sitting at lower range of its trading range. Investors have pushed the stock down since last fall. They have been impatient with ongoing litigation against Dish which is entering appeal process by Dish. At this point, I believe that the stock has most of the negative outcome built into the stock price. Yet the positive catalysts may be around the corner. Tivo will report its earning in early March. The company has guided the sub add outlook for the coming Q lower during last earning call. However, January Q is the traditionally the strongest Q of the year for the company. Tivo is also deploying its long-waited Comcast service this spring. Finally, other cable deals may follow after successful launch of the Tivo service with Comcast. As such, the stock may soon trade higher on these expectations towards the higher trading range.
Ultimately, if Tivo cannot prove to the investors that it has a viable business model, I would expect the company would be taken out at a higher premium this year. Many speculate it could be Google, Yahoo, or Cisco who acquires the company. However, if the service with Comcast proceeds smoothly, don’t be surprised if Comcast step up and takes out Tivo.
The current stocks in that I cover are: Filthy Rich Tech ideas (comprised of Openwave, Avid Technology, Tivo, IBM, and Research in Motion), Filthy Rich Biotech ideas (comprised of Amgen, Celgene, Genzyme, Isis pharmaceuticals, Alnylam pharmaceutical, and Protein Design Lab), Filthy Rich Financial ideas (JP Morgan and Goldman Sachs), Filthy Rich China ideas (Focus Media Holding and Ctrip.com), Filthy Rich Transportation ideas ( American Airline and Southwest Airline), and Filthy Rich Specialty Retail ideas (Peet's coffee)
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