Marvell Technology Group Ltd. (NASDAQ:MRVL) Rating Increased In spite of Legal Trouble


Dallas, Texas 10/18/2013 (Financialstrend) – Marvell Technology Group Ltd. (NASDAQ:MRVL) is an integrated circuits and semiconductor manufacturer registered in Bermuda. On October 15, rating agency Raymond James has recommended a outperform for this tech firm with a market cap of $5.81 billion in spite of recent legal reversals the company had to face with regards to patent infringements. During trading on October 17, the stock price appreciated by close to 2% in value. It ended the day at $11.75 per share which translates to a 71% increase over its previous 52 week low price.

This appreciation yesterday added to its last week’s gains. The stock appreciated 2.89% over the past week. This rally has offset some of the 7.84% loss the share price had suffered over the past 30 days. The dip in value over the past 30 days has its origin in a $1.17 billion legal award that went against Marvell Technology Group Ltd. (NASDAQ:MRVL).

On September 27, a U.S. District Judge reaffirmed a December 2012 jury verdict which had found Marvell guilty of wilfully infringing on the patent rights of Carnegie Mellon. The jury had also awarded $1.17 billion in damages to Carnegie which Marvell has to come good with. The patent fight was centred on Marvell selling hard ware chips whose design was patented by Carnegie Mellon. This court agreed with Carnegie contention that to fix past damages, a royalty of $1.5 should be extracted for every unit of hard drive chip that Marvell had sold across the globe. If the judge decides to go with this calculation, then analysts believe Marvell will have to fork out close to three times the current awarded damages of $1.17 billion.

If the judge does increase the quantum of royalty, then Marvell will be forced to look at its financials more closely. Over the past 12 months trailing period, the company had generated $3.10 billion in sales with net income of $234 million.