Gemstar’s Shares Are Hit Hard by Ruling

Shares of Gemstar-TV Guide International Inc. plunged to a 52-week low Monday as investors reacted to a preliminary ruling on a highly watched patent dispute.

Gemstar tried to reassure investors that last week’s ruling would not affect current relationships with cable TV system operators that license its interactive program guide or the consumer electronics and other parts of its business.

The Pasadena-based company’s stock fell $3.20, or 39%, to $5 on Nasdaq. An administrative law judge with the International Trade Commission ruled against Gemstar’s allegation that its competitors, EchoStar Communications Corp., Scientific-Atlanta Inc. and Pioneer Corp., were infringing its patents for some of its interactive-guide technology.

Gemstar said it intended to appeal the ruling to the full commission.

Several analysts downgraded the stock Monday, saying the decision would hurt Gemstar’s efforts to sign new deals for its program guide with cable operators.

What is unclear is whether the decision will put additional pressure on Gemstar from Rupert Murdoch’s News Corp., which owns 42% of the company. Rumors have persisted that Murdoch would like to exercise more control.