Yesterday, we found out that entertainment giant Paramount (PARA) could have some serious problems on its plate, as it faces down one lawsuit, and potentially, braces for another right behind it should it agree to settle. But as concerns mount over Paramount’s lawsuit exposure, investors are oddly placid about the whole thing. Sufficiently so, in fact, that they sent shares up fractionally in the closing minutes of Wednesday’s trading.
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We know that there are two lawsuits right now that will hit Paramount regardless. Either the lawsuit from President Trump goes to trial, or the Freedom of the Press Foundation (FPF) will launch one should Paramount settle with Trump. As it turns out, though, Paramount’s board of directors is starting to get concerned about the lawsuits and how its insurance policies will react.
The latest reports suggested that Shari Redstone is now willing to pay President Trump $50 million to settle outright. But Paramount’s board is reportedly concerned that Paramount’s Directors and Officers liability insurance would not cover such a settlement as it might be considered a bribe to get the Paramount / Skydance merger back up and running. While some legal experts consider that a far-fetched conclusion, the fear of it may be sufficient for the board to spur Redstone—and by extension Paramount—on to fight, delaying the merger even further.
Really? That Much Cocaine?
Meanwhile, in an odder development, former Paramount CEO Barry Diller offered a wildly unexpected take on an 80s classic film, Popeye, starring Robin Williams as the title character. Diller was involved in a Q&A session at 92Y in New York, where he was talking about his memoir, titled Who Knew. Anderson Cooper then pulled out a question that might not have gone over anywhere else, asking what was the “most coked-up film set he ever visited.” Without any sort of pause for contemplation, or outrage that he might be connected with illicit substances, Diller burst out: “Popeye.”
Diller noted that the impact of such substances could be seen in the film itself, calling it “…a movie that…runs at 78 RPM and 33 speed.” Diller noted that there was so much cocaine involved in Popeye‘s production that the stuff was being sent to the production in film cans. Regardless of any feeling about the substance, though, Popeye did reportedly make double its shooting budget in box office returns.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on two Buys, seven Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 2.82% loss in its share price over the past year, the average PARA price target of $12.20 per share implies 0.99% upside potential.
