Michael,
Catch this one in the Chronicle this morning?
chron.com
>>>>>
Zapata shareholders file suit, say Net strategy was misleading
Copyright 1998 Houston Chronicle
Shareholders have sued Zapata Corp., saying they were misled by the company's short-lived venture to convert itself into an Internet company.
The suit, filed in U.S. District Court for the Southern District of Texas, said "the defendants used misleading positive statements to artificially inflate the price of Zapata stock, causing the price of Zapata shares to quickly double."
It said Zapata managers took advantage of this rise in Zapata's stock price, selling off more than $5.6 million of their holdings at peak prices.
Zapata officials could not be reached for comment late Friday.
The Houston company's stock soared with its announcements that it planned to buy more than 30 Internet companies at a time when investor interest in Web-connected companies was sky-high. But Zapata, which is in the fishing and food products businesses, recently said it was not going to close on those purchases, and was reconsidering its strategy.
Shares of Zapata, which hit a 12-month high of 24 on July 7, closed Friday at 7 3/4, according to Bloomberg News.
The suit was filed by the Philadelphia law firm of Berger & Montague.
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If ever there was a case where both sides deserve to lose this is it. It doesn't take a lot of smarts to smell the spoiled fish when a food products company decides to become an Internet company overnight.
Dave |
