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Share Price Manipulation

If insider trading, press release puffery, and “earnings smoothing” are the tools used to prop up a share price, then frivolous class action lawsuits must be the tool to kill the share price. I received a letter today notifying me of yet another class action settlement from the boom years – this time related to Cisco shares. As with all the others, I waded through the settlement procedure and perused the proposed settlement per share.
This one?? Approximately 9 cents per share, less any court approved fees. The alleged crime? Share price manipulation. The lead plaintiffs feel this is a good settlement. They must be smoking crack and getting kickbacks from the attorneys. What a bunch of crap. I can’t imagine what they’re thinking – could it be that Cisco or its agents went out of its way to inflate the share to $55, but $54.91 was a fair price?? That’s basically what the plaintiffs are saying here. What a load of BS.
And who really gets hurt?? If anyone, it’s the current shareholders. The ~$100 million that it’s going to take to settle the suit is coming out of their value. Oh, and I feel hurt because I spent 5 minutes reading over the materials, 10 minutes being pissed off about it, and another 10 minutes sharing this with all of you. The upshot?? Monday Night Football starts in a few minutes. I don’t know who is playing, but it’s got to be more entertaining than reading, thinking about, and blogging about lawyer drivel.

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