Nasdaq puts Gemstar on notice

By Susan Rush
From The August 27, 2002 Edition Of CED Broadband Direct

Gemstar-TV Guide International Inc.'s failure to file its second quarter results on time may lead to a Nasdaq delisting.

The TV programming guide provider has received a Nasdaq Staff Determination that since it has not filed its Form 10-Q reflecting its second quarter results, its shares are subject to removal from the Nasdaq National Stock Market.

Gemstar has requested a hearing to review the determination. The company has been assured that no action will be taken prior to the hearing, which will be scheduled anytime during the 30 days following the hearing request. There can be no assurance that the hearing will result in a favorable outcome and its shares will continue to be listed, Gemstar said in a statement.

Gemstar recently has been on the losing end of a few patent lawsuit decisions. Earlier this month, Gemstar said it needed to evaluate the impact of these decisions and would delay filing its second quarter results. The company also said it will restate its results for 2001, to reverse the recognition of roughly $20 million in revenue related to its TV Guide subsidiary.

Its board of directors also is evaluating a management reorganization at Gemstar.

News of the notice sent Gemstar's stock into a tail spin. Yesterday, the shares shed more than 18 percent of their value, down to $3.66 a share from a close of $4.48. As of 11:24 a.m. EDT, Gemstar shares were trading at $4.11.

In May, when Diva Systems Corp. filed for Chapter 11 bankruptcy protection from its creditors, Gemstar snatched up the company's software and technology assets for an undisclosed amount. "We believe the addition of Diva's server-based technology to our IPGs, for example, will accelerate our ability to deliver full-motion advertising, movie trailers and other promotional content to viewers through the IPG," said Gemstar-TV Guide Chairman and CEO Henry Yuen, in a press release at the time of the Diva announcement.