Price Forecast:

Bullish Case: If Masimo wins the ongoing patent dispute with Apple, substantial revenue from potential royalties could rejuvenate investor sentiment and drive prices significantly higher, aligning with expected growth in the vital signs monitoring market.

Bearish Case: Should Masimo lose the lawsuit against Apple, combined with ongoing investor skepticism and market volatility, the stock could face further declines, impacting its financial stability and driving investor sentiment negative.

Potential Outcomes:

1. MASI victory in patent case (55% chance) raises stock due to revenue upside.

2. Settlement reached (25% chance) reduces uncertainty, stabilizing prices.

3. Ongoing litigation failing (40% chance) further erodes confidence, lowering stock value.

4. Activist shareholder influence hinders governance (30% chance), destabilizing leadership.

Trading Oracle: Opt for a bullish strategy with a debit spread on MASI; buy $145 call and sell $150 call, targeting potential volatility spikes around legal outcomes or quarterly earnings. With implied volatility skewed high, this captures movement while limiting risk. Consider using 30-60 day expirations for agility, targeting consistent upward price action.

November 05, 2024