OT: $380M + a possible $1B more for punitive damages.
Lexar shares soar on legal victory versus Toshiba
Thu Mar 24, 2005 08:09 AM ET
NEW YORK, March 24 (Reuters) - Shares of Lexar Media Inc.(LEXR.O: Quote, Profile, Research) , a maker of portable memory cards, soared more than 70 percent on Thursday after a California court ordered Toshiba Corp. (6502.T: Quote, Profile, Research) to pay Lexar $380 million in damages on grounds Toshiba was liable for theft of trade secrets.
The jury in the California State Superior Court in San Jose, found Toshiba liable for breach of fiduciary duty, and also found that Toshiba's actions support an award of punitive damages, which are yet to be decided.
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Lexar shares soar on legal victory versus Toshiba
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Lexar shares jumped to $5.45 on INET, after closing at $3.17 on Wednesday.
Lexar, whose cards are used in portable electronics such as digital cameras, mobile phones and MP3 players, said it plans to ask the court for an injunction that halts the sale of Toshiba's products in the United States, including Toshiba's flash memory chips, its CompactFlash, Secure Digital and xD Picture Card products.
CIBC World Markets upgraded its opinon on Lexar shares to "Sector Outperformer" from "Sector Underperformer" on Thursday, saying that the court court deliver a punitive damage award of $1 billion.
"The legal victory levels the playing field and sets the stage for a complete overhaul of Lexar's business model," said analyst Daniel Gelbtuch, in a note to clients. "It potentially allows Lexar to purchase it own (plant) and/or shift to a higher mix of licensing revenues."
Share of Sandisk Corp.(SNDK.O: Quote, Profile, Research) , Lexar's bigger rival, slipped 3.7 percent to $26.90 in early Thursday trade on INET
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