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TiVo Stock Down 19 Percent on Legal Settlement

TiVo Stock traded down 19 percent on Friday after the company settled a patent infringement lawsuit.

Friday morning, TiVo (NASDAQ: TIVO) announced that it had settled patent disputes with Cisco (NASDAQ: CSCO), Google (NASDAQ: GOOG) owned company, Motorola Mobility, and Time Warner Cable (NYSE: TWC). This kept the case from going to trial next week and finally closes the book on a long-time legal battle over its digital video recorder technology.

Under the agreement, Google will pay TiVo $490 million and Cisco will pay the company $294 million, according to a SEC filing. Additionally, licensing deals will be reached with Google, Cisco, and Arris Group (NASDAQ: ARRS). (Motorola Mobility sold its set-top box business to Arris in 2012.)

“We are pleased to reach an agreement that brings our pending litigation to an end and further underscores the significant value our distribution partners derive from TiVo’s technological innovations,” TiVo CEO Tom Rogers said.

If TiVo came out on the winning end, why was TiVo stock down 19 percent? Investors think the settlement amounts are too low. TiVo previously entered into agreements with AT&T, (NYSE: T) Dish Network, (NASDAQ: DISH) and Verizon (NYSE: VZ). This brings the total settlement amount to $1.6 billion.

Analysts echoed Wall Street’s disappointment but pointed out that it’s a longer-term positive for the company to have this issue behind it and that the company didn’t want to see the case in the hands of the jury even if it felt strongly about its case.

Disclosure: At the time of this writing,, Tim Parker was long Verizon.

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