Well, That Was $2.8 Billion Well Spent …

Copy-protection vendor Macrovision’s decision to acquire Gemstar impressed investors about as much as one of the “Welcome Back, Kotter” reruns listed in Gemstar’s flagship magazine, TV Guide. Macrovision shares dropped 24%, to $19.66, and Gemstar lost 18%, to $4.91, on news of the $2.8 billion deal.

Seems the market’s not too keen on Macrovision spending that much money on Rupert Murdoch’s worst investment, even if it will allow Gemstar to offer copyright-protected libraries of shows, movies and music on TVs, mobile phones and the Internet.

In a conference call, Macrovision CEO Fred Amoroso assured investors that the deal makes good business sense. “Look, I recognize this is a complex transaction, no kidding,” Amoroso said. “You’ve got a little company, you’ve got $800 million of debt, there are certainly questions, the debt markets haven’t been the most robust and all of that. But you know what? We don’t make decisions as a factor of what the immediate first-day market reaction is going to be … I have a confidence and a high expectation that as we continue to work over the next few months on integration–and beyond that after closing–that this is going to be an enormous value for our stockholders.”