As the saying goes, "It never rains but it pours."
This morning, I read a Business Times article that ride-hailing and delivery platform Grab is at risk of U.S. class action lawsuits after its share price plunged recently [news].
Several U.S. law firms are taking advantage of the situation to entice Grab shareholders to come forward and take up their offer for litigation against the company management.
While the investigation may reveal no just cause for a lawsuit, I believe the reputational damage is done to Grab. Existing and potential investors may be spooked by the possibility of legal costs further draining the company coffers and distracting the management from focusing on the business.
Getting a U.S. public listing may be glamourous. But it does have its inherent dangers too.
This morning, I read a Business Times article that ride-hailing and delivery platform Grab is at risk of U.S. class action lawsuits after its share price plunged recently [news].
Several U.S. law firms are taking advantage of the situation to entice Grab shareholders to come forward and take up their offer for litigation against the company management.
While the investigation may reveal no just cause for a lawsuit, I believe the reputational damage is done to Grab. Existing and potential investors may be spooked by the possibility of legal costs further draining the company coffers and distracting the management from focusing on the business.
Getting a U.S. public listing may be glamourous. But it does have its inherent dangers too.
Enjoyed this post? Never miss out new posts by subscribing here.
If you have read widely and has an interest in US stock, you would have realised that such "potential" sue is a dime a dozen in the US market. It usually means law firms (usually the small ones) are always on the lookout to help disgrunted investors to "sue" listed companies and they will post all these "rally" informerical to try to get investors to engage them to sue the listed companies that have either IPO-ed or gone thru SPAC merger. So don't always believe what you read and don't be too overtly alarm.... ANd so far I have not come across any sue that had gone to court... At least not to my knowledge. Hopefully Grab will not be the first.. If so, damn suay.... LOL
ReplyDeleteHello JC,
DeleteThanks for writing. Indeed, Grab is unlucky to have caught the eye of litigious opportunists. So many locally based tech firms are gunning for a U.S. listing. I do hope the major shareholders understand the consequences of tapping such a deep liquidity pool.