Microstrategy Settles Lawsuit - 10/25/2000 - SCAC

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Copyright © 2001
Stanford Law School

2000 News and Press Releases

Current News News 2000


SETTLEMENT ARCHIVED:

Microstrategy Settles Lawsuit

Washington Post. October 25, 2000

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Excerpt: "MicroStrategy Inc. said yesterday that it settled a class-action lawsuit filed by shareholders who alleged that the software company defrauded investors by overstating years of revenue and earnings. The financially troubled Vienna firm agreed to pay shareholders $80.5 million in five years, plus interest payments of about $3 million every six months in the meantime. The settlement also includes stock valued at a minimum of $16.5 million and warrants to purchase 1.9 million additional shares from the company at a price of $50 a share--more than double their current level...

In March, before MicroStrategy disclosed its accounting problems, the stock was trading at $226.75. It closed yesterday at $24.75. The stock-market value of the company is now about $2 billion, down from $17.9 billion before the March accounting correction...

The investors who stand to benefit from the settlement include those who bought Microstrategy stock between June 11, 1998 the date of its initial public offering, and March 20, when Microstrategy announced it was restating its results...

The settlements are subject to court approval..."


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