Re: 8/31/00 - [TTN] Titan Files Lawsuit To Halt Short Sellers' Scheme
Titan Files Lawsuit To Halt Short Sellers' Scheme
By Jack Burney
Published by OTCNN.com
08/31/2000 08:35 AM EST
San Diego’s The Titan Corporation (NYSE: TTN) filed a lawsuit against unnamed bashers yesterday “to stop a scheme by unscrupulous short sellers to drive down the price of Titan stock from $44.75 a share on May 1, 2000 to $21.00 a share on August 22, 2000.”
While Titan is an NYSE stock, bashed OTCBB companies and their shareholders saw a strong new ally in Titan.
Titan identified some three dozen screen names used by apparent short sellers to spread false information over the Internet. The California Superior Court of Los Angeles, where the suit was filed, immediately issued a subpoena to require Internet portal Yahoo! to turn over its records showing the identity of those who posted the messages.
The suit seeks damages and an injunction against further securities manipulation. Titan has retained attorneys Marshall B. Grossman and Michael A. Sherman of the Los Angeles law firm Alschuler Grossman Stein & Kahan LLP to prosecute the lawsuit.
Gene W. Ray, Chairman, President, and CEO of Titan said: “Titan has drawn a line in the sand. We will protect the interest of our shareholders. Titan will not tolerate irresponsible and illegal manipulation of its stock.”
The lawsuit contends that short sellers are posting anonymous messages on Internet bulletin boards, issuing anonymous false reports, and using the media to spread false statements and rumors about the company, and that their actions caused Titan stock to plunge.
And plunge Titan did, from a March peak of $60.50 to under $30.00 in late May, rallying in July to about $45, then heading down the slope once more to close Wednesday at $25,00, an overall loss of about 58% of its value.
Titan cited the recent case of Emulex losing over $2 billion in market value within 15 minutes of the distribution of a false press release as another example of “the ongoing abuse of rapid distribution of disinformation through technology for illegal gain.”
"Titan will smoke out and expose the short sellers who wreak havoc in the lives of investors and force them to disgorge their ill-gotten gains,” said attorney Grossman.
“We will follow their trail from the birth of their schemes into the trading rooms. We will remove their cloak of anonymity so that the world will see how these operators spread false information on Internet bulletin boards and through the guise of so-called 'analysts' reports as well as through the financial media," Grossman said.
The lawsuit states that, “on May 1, 2000, Titan shares closed at $44 a share. During the first half of May, the short sellers schemed to drive the price of Titan shares down. By May 25, the price of Titan shares dropped precipitously and closed below $28 a share. By June 20, the shares rebounded and closed above $44 a share.
“The defendants then conspired to drive the price of the shares down once again,” the suit alleges. “On August 7, 2000, the share price closed below $29 a share and continued its slide to trade below $21 a share on August 22, 2000. The market loss to shareholders between June 20, 2000 and August 22, 2000 was a staggering 50% or $1.3 Billion.”
Once exclusively a defense company, Titan has shifted direction. Now, via subsidiaries, it creates, builds and launches technology-based businesses, offering innovative technical solutions.
Three of Titan's four core businesses develop and deploy communications and information technology solutions and services. In addition, Titan markets technology for the electronic pasteurization of food products and is continually identifying promising technologies suitable for commercialization.
Broker/analyst Joseph Charles & Assoc., Inc. has shifted its research focus on Titan from the parent defense company to corporate activities at Titan's Wireless, SureBeam, and Cayenta subsidiaries that are being positioned for public offerings.
“We believe these subsidiary companies represent an intrinsic value to Titan of $26 per share based upon the low end of the range of the two S1's that have been filed and valuing Titan Wireless through a peer group analysis,” the NASD member firm said. “This excludes the value of the core defense business, which should generate in excess of $750 million in revenues and almost $70 million in EBITDA, which probably adds another $13 per share to Titan’s value.”
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