Shares Plummet as Macquarie Suggests Light & Wonder Risks IP Lawsuit

Macquarie analysts suggested that Light & Wonder could face another lawsuit from competitor Aristocrat. Although the former group’s financial experts reiterated an optimistic outlook for Light & Wonder, their lawsuit suspicions caused the company’s stock to take a dip.

Light & Wonder’s Stock Was Affected by Earlier Trouble

A few days ago, Macquarie suggested that Light & Wonder could face litigation by Aristocrat. Bolstered by the previous legal battle between the two gaming providers, these rumors instantly took a toll on Light & Wonder’s stock.

As of the time of this writing, the company’s shares are worth $86.26 apiece. For comparison, the Light & Wonder shares were worth over $107 around March 24.

Light & Wonder’s legal battle against Aristocrat involved the Dragon Train game, which allegedly infringed on the latter company’s property. Aristocrat insisted that Light & Wonder had copied its Dragon Link series, pointing out certain similarities between the two titles.

In September, Aristocrat won a court order to stop offering Dragon Train in North America, at least until Light & Wonder releases a compliant version of the game. Experts predicted that the legal trouble could cost the latter company some $150 million.  

The ruling had caused a significant decline in Light & Wonder’s share price, which had exceeded $112.68 prior to the September ruling. Since then, the company’s shares have fluctuated greatly, temporarily rebounding between early February to March.

Light & Wonder’s Troubles May Not Be Over Yet

According to Macquarie, Aristocrat, emboldened by its legal victory, might pursue additional litigation in regard to Jewel of the Dragon. The firm’s experts suggested that they believed there had been additional communication regarding the matter.

For context, Dragon Trail was a game that Emma Charles, a former Aristocrat employee who was accused of leaking trade secrets to Light & Wonder, has worked on. Earlier this month, Aristocrat critiqued Light & Wonder for not having published a list of all the games Charles has worked on. As a result, it is possible that Light & Wonder’s IP-related woes are not over yet.

However, Macquarie experts suggested that even if that happens, the damage would not be as great as the one caused by the Dragon Train litigation. Because of that, Macquarie reiterated its outlook for Light & Wonder, trusting the developer to fulfill its $1.4 billion EBITDA target.

In the meantime, Light & Wonder managed to record a smaller victory against Aristocrat in Australia.