Tivo shares down after EchoStar wins court stay

NEW YORK (Reuters) - Shares in TiVo Inc (TIVO.O) fell more than 15 percent on Thursday, a day after EchoStar Corp (SATS.O) and DISH Network Corp (DISH.O) won a temporary stay to avoid disabling millions of digital video recorders said to infringe TiVo's technology.

The original Texas court order would have affected millions of DISH digital video recorders giving TiVo an upperhand in any settlement negotiations said analysts.

"TiVo have lost their leverage with DISH for now," said Thomas Eagan, analyst at Collins Stewart. He said it was now more likely that DISH and TiVo settle ahead of a November Appeals Court hearing.

TiVo shares fell by $1.62 to $9.15 in afternoon trading on the Nasdaq. The maker of video recording technology had seen its shares jump nearly 40 percent last month after a Texas court had ordered DISH to disable its DVRs.

TiVo said it was confident the original Texas order will be upheld once the Appeals Court has reviewed the merits of the case.

Eagan estimates that the DISH will agree to a lower licensing fee of around $2 per subscriber which would lower forecasts for its 2010 earnings before interest, taxes, depreciation and amortization.

DISH shares fell by 39 cents to $16.09 which shares of sister company EchoStar fell by 22 cents to $15.92.

DISH is the second largest satellite TV provider in the U.S. and EchoStar is its technology arm which produces its own branded DVRs. Both companies are controlled by entrepreneur Charlie Ergen.

(Reporting by Yinka Adegoke, editing by Leslie Gevirtz)