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Stac Electronics Sees Stock Surge Following IBM Licensing Deal

Strategic Insights

— 2 min read

Stac Electronics, a California-based data compression technology firm, saw its stock jump significantly after signing a supply pact with International Business Machines Corp. (IBM) to license its Stacker data compression technology. The deal, announced after market hours on Wednesday, allows IBM to provide Stac's data-compression technology in future versions of PC DOS. The agreement marks a significant win for Stac, which has been at the center of a high-profile patent dispute with Microsoft Corp.

Key Takeaways:

  • Stac Electronics' stock price surged $1.375 to $6.625 a share in Nasdaq trading after the company signed a supply pact with IBM to license its Stacker data compression technology.
  • The deal allows IBM to provide Stac's data-compression technology in future versions of PC DOS, a key move for Stac as it seeks to expand its market presence.
  • Stac's president, Gray Clow, stated that the agreement reinforces the company's status as a supplier of premier data compression technology across multiple platforms.
  • Stac had previously won a major court victory in February over Microsoft Corp., with a Los Angeles jury finding the software giant had infringed a Stac patent and ordering Microsoft to pay $120 million.
  • Microsoft has said it will appeal the verdict, and it is uncertain if the ruling will stand up.
  • Stac's stock had previously fallen to $3 after Microsoft announced it was shipping its MS-DOS 6.0 operating system software with a Doublespace data-compression feature.
  • The Stacker LZS technology has been shown to allow personal computers to store nearly twice as much data on hard disk drives without buying bigger drives.
  • Stac also announced the extension of its Stacker 4.0 product line to support users of MS-DOS 6.0 and 6.2, PC DOS 6.1, and Novell DOS 7.

Statistics:

  • The market value of Stac's stock increased by $1.375 per share after the IBM licensing deal was announced.
  • IBM plans to provide Stac's data-compression technology in future versions of PC DOS.
  • Stac's Stacker LZS technology allows personal computers to store nearly twice as much data on hard disk drives without buying bigger drives.
  • Stac won a major court victory in February over Microsoft Corp., with a Los Angeles jury ordering Microsoft to pay $120 million in patent infringement damages.
  • Microsoft has shipped 22 million copies of its MS-DOS 6.0 operating system software with Stac's data-compression technology prior to the patent infringement ruling.
  • Stac went public in May 1991 at $12 a share and then fell to $3 after Microsoft announced it was shipping its MS-DOS 6.0 operating system software with a Doublespace data-compression feature.

Sources:

  • "Stock of Stac Electronics Jumps After IBM Pact," Los Angeles Times, April 7.
  • "IBM to Provide Stac's Data-Compression Technology in Future Versions of PC DOS," Reuters, April 7.
  • "Stac Electronics Wins Major Court Victory Over Microsoft Corp.," Los Angeles Times, February [no date provided].

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