Gambling vs investing

Hot off the press. Disney have "filed a petition to seek leave for a rehearing en banc with the Ninth Circuit" regarding the award of the damages made against them in favour of Celador.

It shouldn't come as any great surprise. Disney have tried to drag this out for as long as possible. It seems clear that they will pursue it to the bitter end i.e. until every possible option has been closed to them.

I have no idea how long the process could take from here, but I'd be very surprised if the ruling was overturned at any point. Quite frankly it would make a mockery of their judicial system, although Disney are clearly hanging on in there with a faint glimmer of hope!

As I mentioned before, the rapidity with which the ninth circuit rejected Disney's appeal seems to suggest that Disney's arguments against the ruling are weak, and I can't see that another panel of judges will wish to overule a jury, the original trial judge and three of their own judges. It may take some time yet, but I do think the original award will stand and that Avesco will eventually receive their $60m share.

However, the above does illustrate the huge difference between gambling and investing on the stock market.

Avesco is a profitable, cash generative and growing business that is more than worth its current valuation without any payout from Disney. Investors will have bought shares based on Avesco's prospects at present and for the future. However, the gambling fraternity have undoubtedly been buying and selling on every twist of the Disney case. I doubt very much if many of the gamblers have made any decent profits.

I shall sit tight and await Avesco's full year results with interest. Whilst 2013 won't be quite as spectacular as 2012 (the odd year effect), I anticipate that underlying growth will be encouraging and I expect that dividends will continue to rise.