Rovi’s Partnership with Apple

Sometimes you are hot, sometime you are neutral, and sometimes much of what you just turns cold. Last Friday, Rovi Corporation (ROVI) broke support intraday and looked in trouble. I’ve been selling off many of our other positions the past week and a half as they have been running non stop but this was a name that had not had that big run, so it had been still a large position. Then Friday, due to the chart I cut the position down by 55% to reduce risk. It rallied later in the day but only right back to the support/resistance level. This morning the company announced a golden goose in the current market – a partnership with Apple (AAPL) which sent the stock into the stratosphere.

It has since given back much of that gain in the ensuing hour but it still smarts… you can’t do much about these out of the blue announcements either bearish or bullish, but sometimes the market just has your number.

Rovi (ROVI) shares are trading sharply higher this morning after the companydisclosed in an SEC filing that it has signed “a multi-year agreement” to license intellectual property to Apple (AAPL). Terms of license “are confidential,” Rovi said.

Known as Macrovision Solutions until last year, Rovi provides software for discovery and management of entertainment content, as well as copy-protection technology for media companies.

Frankly this announcement does not say much but in 1999 all you had to do was announce your company was starting a website and the stock would surge 14% immediately, while now you need to announce your company is (a) part of the cloud or (b) partnering with Apple – and you get the same surge.

Disclosure: Long Rovi in fund; no personal position

About Mark Hanna 543 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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