Shares in Fox Corp [NasdaqGS:FOXA] have been trending cautiously upwards over the last couple of days as investors digest the impact of a major lawsuit the company fought with Dominion Voting Systems. The company agreed to settle a defamation suit for USD 787.5m after Fox newscasters spread allegations of vote rigging in the wake of the Donald Trump election defeat in 2020.
The suit is being hailed as probably the most damaging outing in court for Rupert Murdoch since the News of the World phone hacking scandal in 2011. Analysts are questioning why Murdoch himself did not do more to guide Fox away from attacking voting technology companies in what is now likely to prove a very costly situation for shareholders.
Fox Corp stock is highly likely to be dictated by news flow coming out of the court room in months to come as management tries to dig its way out of a hole that could see further litigation sparked off by coverage of the 2020 US election and its immediate aftermath.
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There is something of a relief rally in the shares at the moment, possibly because investors can crystallise the loss of the Dominion suit, and possibly also because there were fears the trial was going to take longer. It still represents one of the biggest defamation suits in history. Bear in mind, however, that Dominion had been seeking over USD 1.6bn. This would have been a huge wrecking ball through the Fox balance sheet.
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