One of the biggest outstanding items on entertainment giant Paramount’s (PARA) to-do list is “fend off a lawsuit from an angry sitting President.” But Paramount got one step closer to that today, having selected a mediator in the case. The news was not welcome to shareholders, however, and Paramount shares slid into a better than 2% loss in the closing minutes of Tuesday’s trading.
The lawsuit in question features President Trump seeking a whopping $20 billion in damages from CBS, which basically means from Paramount. Most of it stems back to how the news show 60 Minutes modified and edited for air an interview with then-Vice President and Presidential hopeful Kamala Harris.
The case is already contentious going in, with Paramount calling it “an affront to the First Amendment” as well as being “…without basis in law or fact.” Paramount has also demanded several documents from Trump, which would substantiate the reasoning behind the $20 billion damages request. Neither President Trump, nor his attorneys or representatives, have supplied those documents accordingly. As for who the mediator in question is, or his or her qualifications, that is unclear, as just who this mediator is is not yet revealed. All that was revealed was that this person exists now.
Happy Automatic 90-Day Extension!
As for the merger between Skydance and Paramount, it has dragged on significantly longer than anyone expected. In fact, with today’s arrival, a clause in the contract has kicked in that sends the agreement into extra innings. A 90-day extension period has officially been entered, and another may yet follow.
The contract allows for two automatic 90-day extensions, reports note, and the first one has now come and gone. This basically means the contract has about six months to live, and given how many forces are arrayed against it—two pension funds, Mario Gabelli, and the Federal Communications Commission (FCC), among others—they may need every minute of that period just to get the deal done. If it can get done at all.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, seven Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 0.6% loss in its share price over the past year, the average PARA price target of $12.33 per share implies 15.4% upside potential.
