Likelihood of Settlement vs. Trial
In U.S. securities classâaction practice, the overwhelming majority of cases are resolved through settlement rather than a full trial. The âlead plaintiffâ deadline of 30âŻSepâŻ2025 gives the plaintiffsâ counsel roughly 12âŻmonths to certify a lead plaintiff and move the case forward. Historically, once a lead plaintiff is identified, the parties often begin settlement talks within weeks to avoid the high litigation costs and the uncertainty of a jury verdict. Given the relatively long runway before any trialâdate could be set, the probability that the case will be settledâeither via a modest cash payment or a structured âfairâvalueâ settlementâcomfortably exceeds 70âŻ%.
Trading Implications
Novo Nordisk (NYSEâŻNVO) is a highâquality, cashârich business with robust earnings growth, so the lawsuit is a tailârisk rather than a fundamental catalyst. The market has already priced in the negative sentiment (â70) with a modest discount to the stockâs 12âmonth fairâvalue. If settlement talks surfaceâespecially a figure that is lower than the âfairâvalueâ rangeâexpect a shortâterm bounce as the downside is capped. Conversely, a move toward a trial (e.g., a courtâset trial date, no settlement offers) would keep the risk premium elevated, likely pressuring the share price lower and widening the bidâask spread.
Actionable Takeâaway
- Hold the position if youâre a longâterm holder; the core business remains strong.
- Watch for any settlementârelated press releases (leadâplaintiff appointment, settlement offer, or âfairâvalueâ proposal) in the next 3â6âŻmonths.
- If a settlement is announced at a modest amount, consider a shortâcover or modest takeâprofit on the bounce.
- If the case moves toward trial with no settlement signals, tighten stops or reduce exposure, as the downside risk could widen.
Overall, the odds favor a settlement, and the market will likely reward the stock on any credible settlement news.