Angie's List's Undisclosed Class Action Suit: What Could It Mean To Shareholders?
This is very damning evidence that ANGI is on the way down to pennies and eventually bankruptcy.
The lawsuit in itself will hurt their already negative earnings weather they settle, win, or lose. Further, the auto-renew at higher price could be major part of their revenue growth. This implies significantly adverse impact on the revenue growth which is the bulk of the valuation.
From the very beginning, I thought this company should never have gone public. A buyout was a more likely exit. But, NO, the investors couldn't get anybody to agree for a $300MM buyout so the public is easier to fool.
They will be out of cash in 2 years. Sooner if they do not successfully defend the law suit. The law suit in any case will bring adverse publicity to the business mode and reveal the less than ethical standard they operate the business. This will be a big hit. Stock goes down from here.