What happened

In response to receiving some positive commentary from a Wall Street analyst, shares of Akorn, Inc. (NASDAQ:AKRX), a maker of specialty generic pharmaceutical products, rose as much as 11% in afternoon trading today. As of 3:15 p.m. EDT, shares were up about 7%. 

So what 

Shareholders can thank RBC Capital analyst Randall Stanicky for today's price action. Stanicky published a bullish research note today related to Akorn's potential takeover by Fresenius Medical Care AG & Co. (NYSE:FMS) that has traders feeling excited.

If you haven't been following this story closely, Fresenius signed a deal to acquire Akorn for $34 per share last year. However, Fresenius recently decided to terminate the deal after it performed some due diligence on the company and came away displeased.

Despite the setback, Akorn's management team remains adamant that Fresenius did not unearth any evidence that could allow it to terminate the signed agreement and is fighting hard to ensure that the merger closes.

Two people looking at legal documents

Image source: Getty Images.

With shares of Akorn trading in the low teens, it is obvious that Wall Street has lost all faith that this deal will ever get done. However, Stanicky looked at the publicly available court documents from this legal battle and concluded that he still sees "a path for the deal to close."

That renewed optimism is fueling today's rally.

Now what

It is impossible to know how this legal dispute will end, so Akorn's shareholders need to make sure that they want to own the company no matter the outcome. Personally, I find it troubling that Fresenius took a hard look at Akorn's business and is now doing whatever it can to stop the deal from happening. For that reason, I plan on keeping this stock far away from my portfolio.