Creative enjoys stock gains after suing Apple

A cynical person would look at the stock market gains that Creative enjoyed after suing Apple and wonder whether that was part of the reason they did it. Creative shares gained 85 cents to close at 10 Singapore Dollars Tuesday. It was the second day in a row that Creative has seen a price increase after they filed their patent infringement suit against Apple.

Though the news is good for investors in the short term, analysts say that it is very unlikely to be sustained over the long term. Fighting the legal battle will divert resources from executive and the rest of the company towards the fight, when they need to be focused on turning around the company which is seeing earnings fall consistently as they have been unable to compete with the iPod. Unless Creative were to achieve a very unlikely complete victory in their legal efforts, the long term prospects are not good. Despite the recent gains, many analysts are maintaining their sell recommendations.


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