Weird News of the Week
I saw an advertisement in a major magazine where litigators are looking for shareholders of VMWare for a class action lawsuit. A Google search shows several recent results on the same story but here's one that's fairly explanatory. PR-Inside is reporting that a securities class action suit had been filed against VMWare and certain of its officers on behalf of persons who purchased shares in the company between a time period of roughly April - July 2008. This type of case is fairly common anytime a stock experiences a significant drop in value. Over the course of the last year, VMWare stock has ranged from a high of $93.20/share to a low of $17.25. It is currently trading at $24.99 as I write this.
When I reviewed the IPO prospectus for VMWare, I made my own pricing decision on the stock and was flabbergasted at the initial offering price it received. Obviously, I passed on the stock as I thought it was overpriced. It's priced much more realistically today. If some of the initial investors are suing because the stock price fell off from its IPO-high, that's just tough luck. They should have read the prospectus.
Also in my email this morning is a notice that National Lampoon, Inc. is experiencing a more serious issue. Apparently, seven individuals and two corporations are being charged with fraudulent schemes to manipulate the market price of the company. Those charged include National Lampoon's CEO and trading in the stock has been suspended until 12/29/2008.
Given the spoof/parody history of National Lampoon, I thought this was a joke. But, just look at the stock ticker for NLN and you'll see this isn't funny business but really serious stuff.
I must have missed these stories lately as the papers here in Illinois are singularly focused on a different set of issues: the governor's office and the potential sale of a U.S. Senate seat.
It's to the point that a person needs to be an attorney to read the paper or run a software firm. In the end, of all the events mentioned above, I'll bet the VMWare issue turns out to be the most non-event of them all.