A number of US law firms are inviting investors in Priceline.com
to join class action lawsuits that have been filed on behalf of
shareholders, alleging that the company and some of its officers
and directors issued false and misleading statements concerning the
company’s business and financial condition, particularly as to when
the company would become profitable. The law firms are looking to
recover damages from the troubled company on behalf of
investors.
Priceline.com is a high profile US site with a patent for its
reverse-auction business model (where buyers say what they want and
how much they will pay; the sellers then compete for the
business).
The share price of the company has plummeted by 79% in less than
one month. Its value is now 97% less than it was shortly after
flotation in April 1999.
The closure of Webhouse Club, a grocery and petrol site that was
a licensee of Priceline.com, was announced last week. The
announcement worsened the fall in the value of Priceline.com. Jay
Walker, the founder and Vice Chairman of Priceline.com, put $125
million of his own money into Webhouse Club. His shareholding in
the Priceline.com has fallen from a value of $1.7 billion to $242
million in just three weeks.
