LITTLE ROCK -- May 11, 2001 When Ventro's stock plummeted last year from $243 per share in March 2000 to under $2 by December, it looked like the company was in big trouble. But this week, after a class action lawsuit was filed against Ventro on behalf of all individual and institutional investors of the company, you can be certain that this company is in big trouble.
CEO Dave Perry a good looking, smooth talker, but I don't think charm can save him now.
According to a recent announcement, the law firm of Cauley Geller Bowman & Coates, LLP has filed a class action in the United States District Court for the Northern District of California on behalf of all individuals and institutional investors that purchased the common stock of Ventro Corporation between February 15, 2000 and December 6, 2000, referred to as the "Class Period".
The announcement gives the following legal synopsis of the situation: The complaint charges that the company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information about the company's financial condition and future growth potential, and as a result of these false and misleading statements the company's stock traded at artificially inflated prices during the class period. Specifically, during the Class Period, Ventro built and operated platforms for vertical B2B e-commerce marketplace companies. The complaint alleges that by December 1999, defendants knew that Ventro's existing business model did not work. Moreover, by the beginning of the Class Period it was evident to defendants that Ventro did not possess the technology to successfully compete as a marketplace. Defendants knew this would severely impair Ventro's future revenue growth. However, defendants wanted to raise additional money through debt offerings before the bottom fell out of Ventro's stock price. Thus, defendants continued to make positive but false statements about Ventro's business and future revenues. As a result, Ventro's stock traded as high as $243-1/2 per share during the Class Period. Then, on Dec. 6, 2000, Ventro announced a restructuring in which it closed down two out of three of its main B2B marketplaces. In early 2001, it was revealed that Ventro's CEO and the other defendants had realized by December 1999 that Ventro's business model of independent marketplaces didn't make sense and it was revealed that even Ventro's partners were not satisfied with Ventro's technology for operating the marketplaces. By this time Ventro's stock had declined to less than $2 per share, inflicting billions of dollars of damage on plaintiff and the Class. Defendants' misconduct has wiped out over $4 billion in market capitalization as Ventro stock has fallen 99% from its Class Period high of over $243 per share as the truth about Ventro, its operations and prospects began to reach the market.
Now that's what I call a sticky situation!
Bought Ventro stock? Feeling scammed? The announcement goes on the say: If you bought Ventro common stock between February 15, 2000 and December 6, 2000, inclusive, you may, no later than May 29, 2001 request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Cauley Geller Bowman & Coates, LLP, or other counsel of your choice, to serve as your counsel in this action.