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Enterprise software developer ServiceNow ( NOW ) advised the Securities and Exchange Commission Wednesday that a federal court in Texas has granted a 30-day stay of all deadlines — notably this Friday’s deadline to start trial — in its defense against patent-violation claim s by BMC Software. ServiceNow and BMC requested the stay “so that the parties may document the agreement and submit appropriate dismissal papers,” ServiceNow said in an 8K filing with the SEC. What now? ServiceNow stock was down 1%, below 60, in early afternoon trade in the stock market today , after rising 3.6% Tuesday as word spread that a legal settlement was in the works. ServiceNow stock still is up for the week and could notch its fourth consecutive week of gains, after shares hit a 22-month low in early February. Shares are still 34% off a record high of 91.28 set Dec. 4. ServiceNow went public in June 2012, priced at 18. More-established rivals Salesforce.com ( CRM ) and SAP ( SAP ) were making their own moves. SAP, the largest in IBD’s Computer Software-Enterprise industry group by market cap, was up a fraction, near 77, Wednesday afternoon, just 5% off a nearly two-year high of 81.21 set Dec. 29. No. 2 player Salesforce.com was up 1.5%, near 71, 14% off a record high of 82.90 set Nov. 19. With a market cap of $9.6 billion, a tenth the size of SAP, ServiceNow is the fifth-largest member of the industry group. Evercore ISI analyst Kirk Materne, in a research note Wednesday, said that the dispute with BMC is “more of a short-term concern … than a wall of worry related to a possible penalty or injunction. “Nevertheless, we believe the (pending) settlement between the two companies does remove a near-term overhang and should allow investors to refocus attention on the longer-term opportunity,” he wrote. “We do not believe that the trial with BMC was impacting sales cycles. … We continue to like the risk/reward longer-term, but as we noted after meeting with the company in early February, NOW is likely to remain in ‘show me’ mode until it reports” its Q1 results. ServiceNow stock crashed 16% on Jan. 28 after the company reported Q4 billings below expectations, though EPS ex items jumped 533% to 19 cents, twice analysts’ expectations, and revenue rose 44% to $285.6 million, also topping Wall Street views. Materne maintained a buy rating on ServiceNow stock, with an 83 price target. Hewlett Packard Enterprise ( HPE ) also has patent infringement claims pending against ServiceNow, filed originally by the former Hewlett-Packard company. Scalper1 News
Scalper1 News