Q: Hi Peter and Team,
Do news stories like this affect the stock price of either the plaintiff or the defendant?
“Quebecor Inc.-subsidiary Videotron is suing Rogers Communications Inc. for $91 million over an alleged breach of contract related to the sale of Freedom Mobile two years ago.”
We have a small holding in QBR.B and although it’s slightly down in price compared to when we bought it, it certainly is holding up better than our large holding in BCE (down almost 50%, not including dividends), but BCE is an issue for another question!
Thanks for the great help you’ve supplied over the years.
Do news stories like this affect the stock price of either the plaintiff or the defendant?
“Quebecor Inc.-subsidiary Videotron is suing Rogers Communications Inc. for $91 million over an alleged breach of contract related to the sale of Freedom Mobile two years ago.”
We have a small holding in QBR.B and although it’s slightly down in price compared to when we bought it, it certainly is holding up better than our large holding in BCE (down almost 50%, not including dividends), but BCE is an issue for another question!
Thanks for the great help you’ve supplied over the years.
5i Research Answer:
Lawsuits are fairly common amongst companies. Generally, they take years to play out, and investors tend to thus discount them somewhat. They can change investor sentiment, though, depending on the situation. They tend to impact the defendent more, but often the dependent will counter-sue as well. In this specific example, considering RCI.B's $19 billion market valuation, we would not expect any impact as the amount noted in the suit is not material to it.