Call it a bit counter-intuitive, but studio legend and streaming giant Paramount (NASDAQ:PARA) recently brought out a win in court that likely saved it a pot of cash and some trouble. But investors weren’t at all happy about it as shares were down nearly 5.5% in Monday afternoon’s trading.
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The good news for Paramount connects back to a lawsuit that some were calling the Top Gun: Maverick lawsuit. The lawsuit in question came about when some believed that the film cribbed heavily from a 1983 article by Ehud Yonay titled “Top Guns,” which was itself focused on a San Diego fighter pilot training school.
The case was outright shut down, though, once Judge Percy Anderson noted that copyright law cannot be extended to “factual elements,” like the actual people described in “Top Guns,” or on “familiar plot elements” like pilots being shot down. Further, Anderson noted that copyright can’t protect “the sheer love of flying” as a basic theme.
Meanwhile, on the M&A Side
That should have been good news sufficient to send shares spiking, but what might have proven so disastrous was reports of a possible buyout deal. Reports suggested that Paramount might be inclined to trade $5 billion worth of its own stock to buy Skydance. That would also send $2 billion in cash outright to National Amusements, which owns Paramount. Further, Skydance would pile some extra cash into Paramount, which it’s been needing in recent days as it looks to pay off debt.
Is Paramount a Good Stock Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 48.54% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 17.61% upside potential.
