One thing has held true since the bubble burst and long before then: When shares of a company get hit hard, attorneys file class action lawsuits against a company for misleading shareholders and causing losses. There was a suit filed against Limelight Networks, Inc. (NASDAQ:LLNW) today, but after looking on the surface there have been a slew of suits. It looks like seven suits have been filed so far:
August 21: Lerach Coughlin Stoia Geller Rudman & Robbins LLP
August 20: Klafter & Olsen LLP
August 20: Wolf Haldenstein Adler Freeman & Herz LLP
August 17: Roy Jacobs & Associates
August 15: Federman & Sherwood
August 15: Law Offices of Brian M. Felgoise, P.C.
August 13: Paskowitz & Associates
Interestingly enough, it seems that law firms never go after the underwriters. That isn’t the always the case and a huge master settlement has been paid by top firms, but these law firms tend to file against the company itself. When you see a stock price at $15.00 in June, gap over $20.00 on the IPO, come off and then go higher, just to fall off a cliff. Shares are currently under $8.00 and the trading range since its IPO is $7.96 to $24.33.
Needless to say, the firms filing suits now may need to look elsewhere. Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) were the lead underwriters in this last offering.
Jon C. Ogg
August 21, 2007
Jon Ogg can be reached at email@example.com; he does not own securities in the companies he covers.