TVG parent stock plummets

Shares in Gemstar-TV Guide Inc., the parent company of Television Games Network, plunged 37 percent on Tuesday after the company disclosed accounting procedures that unsettled investors.

Gemstar said in a Tuesday filing with securities regulators that it had recorded $20 million in advertising revenue for its onscreen television guide from a swap for intellectual property, not cash. The company also said that it was owed $108 million from Scientific-Atlanta, which is locked in a patent dispute with Gemstar.

By the end of the day, Gemstar's stock had fallen $5.35 to $9.01. The stock has traded as high as $90 in the past 18 months.

The disclosures were not related to TVG, which has lost more than $100 million over the past three years.

Henry Yuen, the CEO of Gemstar, called the accounting procedures "reasonable and fair." Yuen also said he was confident that Gemstar would win its lawsuit against Scientific-Atlanta and collect the money it was owed.

The announcement of the accounting procedures came one day after TVG was launched on the Adelphia digital cable system in the Los Angeles area, expanding the network's reach by approximately 100,000 homes.

Gemstar announced in mid-March that it lost $600 million in 2001, and that its co-president, Peter Boylan, was resigning. Its stock plunged 26 percent that day to just over $16.