My advice?
I guess I could draft a slick internal memo...
*** S&Z Internal Memo ***
TO: S&Z
SUBJ: re: your query, "What the heck should we do?"
1. I'm not panic-selling. I believed in wireless four months ago and nothing has changed. BANX is the key. Yes, I think CAWS might slip Monday. Maybe even into Tuesday -- and below $3. But lawsuits, regardless of what we've seen on t.v., do not last forever.
I never sell short, so I'm not going to start now.
2. Milberg Weiss has a killer shark reputation. See the article in Buzz Mag. at buzzmag.com Here's an excerpt:
"Companies know when they're sued by Milberg Weiss that they've come
into the sights of a well-oiled machine that does almost nothing but
these kinds of suits," says Brian Borders, president of the Association
of Publicly Traded Companies, an organization of small and midsize
corporations, many of which have felt [its] sting. "You're going to
need exceptional defense counsel and an extraordinary amount of
resources -- or you better make a business decision to settle in a
pretty quick time frame. [They are] to say the least, intimidating."
3. In the press release, Milberg Weiss alleges that CAWS made false and misleading statements about their progress, market conditions, etc. To win in court, they must show this by a preponderance of the evidence, or more likely than not.
To succeed, they'll to need to find a smoking gun, like an internal memo discussing problems that were never publicly disclosed. The more "conspiracy" documents they can locate, the better their case. And this is where litigating gets EXPENSIVE. The firm can file numerous discovery requests. They could ask for every document ever created by CAWS during a certain time period related to their wireless efforts. And ask to interview, or depose, dozens of CAWS officers. Etc. $$$
4. Thus, as a CAWS shareholder, it is clearly not in my interest to join the suit. UNLESS there really was a conspiracy (gasp). If so, and GKM executives were abducted by aliens, we'd better move to 'Area 51' immediately!
5. Part of the reason why corporations settle in advance of trial is the huge cost of trial preparation. The other is that they're scared &%$less about what ginormous verdict an angry jury might hand down.
6. Nothing unethical about filing a shareholder suit unless it's frivolous or based on a nonsense argument. And it's generally unwise to sue a law firm on a whim.
7. If I had to work on a weekend, I wouldn't answer the office phone. Especially knowing that lots of upset shareholders might be calling.
But I would put a P.R. response on the web page, PRNewswire, etc. indicating that the firm was aware of the suit, ASAP!
"Proud to be S&Z"
AK |
