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Affymax, Inc. (AFFY) Message Board

  • godwinpeak godwinpeak Sep 15, 2013 6:42 PM Flag

    Reply to Jagan: Name one company where a Lawyer got you couple of $'s per share in securities litigation?

    Jagan. Again you demonstrate your true ignorance. The reason why you will not find securities class action distributions in the dollars per share, whether by settlement or judgment, is because the amounts distributed are based on "damaged" shares, which accounts for share trades during the class period. The numbers of shares traded are enormous, and not limited to just the 37M AFFY issued and outstanding shares.

    Here is the rub for you AFFY longs. The settlement amount distributed is a charge against all those who then own AFFY shares at the time of settlement/judgment, and this can easily be $2 per share or more. For example, AFFY's class actions claim damages of between $431M and $925M. If judgment were entered for this amount and with 37M AFFY shares outstanding, that equates to $11.61 to $25 per share.

    Of course, securities class actions never recover full value, and most are settled within about 4 years. In Bajaj, Mazumdar and Sarin, "Securities Class Action Settlements: An Empirical Analysis (Nov. 16, 2000), it was determined that average settlement of actions with over $100M in market drop, was 15.73% of the total market drop. Based on this average, the settlement value of the AFFY securities class action can be said to be somewhere between $67.79M and $145.5M. With 37M AFFY shares outstanding, that equates to $1.83 to $3.93 per share.

    I understand AFFY has insurance, nobody knows how much, and after insurance proceeds AFFY's current shareholders take the hit.

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