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CNN Live At Daybreak
IPO Settlement
Aired June 27, 2003 - 06:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Well time to check on the business. Investors who lost money when the dot-com bubble burst are one step closer to getting some relief.
For more on that, let's go to Carrie Lee at the Nasdaq market.
Hi -- Carrie.
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Fredricka.
We're talking about over 300 companies here that went public that initiated IPOs at the height of the Internet bubble and now they've agreed to pay at least $1 billion to settle charges that they cheated small investors.
Now at issue here is whether Wall Street firms inflated the price of the stocks that individual investors had to pay when they paid for a stock the day it went public, thus making the losses bigger when the bubble burst. Interesting to note that 10 percent of these companies have since gone bankrupt.
Now aggravated investors are going to have to wait perhaps years to actually see any money, though. This is a very complex litigation. Bottom line, though, there is a second portion of the case that involved 55 brokerages, big names like Merrill Lynch and Morgan Stanley, that underwrote these IPOs and that part of the settlement has to be resolved first.
But people certainly poured a lot of money into these stocks some years ago, $119 billion to be exact, into 1,000 IPOs in the 26 months prior to the March 2000 market peak, this according to Thompson Financial. Now people certainly aren't going to get back all of that money, only a portion of it. But as I said, as much as $1 billion.
This is far more than the other settlement we heard about earlier this year in which individual investors will get about $400 million. So at least they're getting some money, Fredricka. We'll see exactly how much in the weeks to come.
WHITFIELD: All right. It's a little bit of good news there. Thanks very much, Carrie.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired June 27, 2003 - 06:17 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Well time to check on the business. Investors who lost money when the dot-com bubble burst are one step closer to getting some relief.
For more on that, let's go to Carrie Lee at the Nasdaq market.
Hi -- Carrie.
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Fredricka.
We're talking about over 300 companies here that went public that initiated IPOs at the height of the Internet bubble and now they've agreed to pay at least $1 billion to settle charges that they cheated small investors.
Now at issue here is whether Wall Street firms inflated the price of the stocks that individual investors had to pay when they paid for a stock the day it went public, thus making the losses bigger when the bubble burst. Interesting to note that 10 percent of these companies have since gone bankrupt.
Now aggravated investors are going to have to wait perhaps years to actually see any money, though. This is a very complex litigation. Bottom line, though, there is a second portion of the case that involved 55 brokerages, big names like Merrill Lynch and Morgan Stanley, that underwrote these IPOs and that part of the settlement has to be resolved first.
But people certainly poured a lot of money into these stocks some years ago, $119 billion to be exact, into 1,000 IPOs in the 26 months prior to the March 2000 market peak, this according to Thompson Financial. Now people certainly aren't going to get back all of that money, only a portion of it. But as I said, as much as $1 billion.
This is far more than the other settlement we heard about earlier this year in which individual investors will get about $400 million. So at least they're getting some money, Fredricka. We'll see exactly how much in the weeks to come.
WHITFIELD: All right. It's a little bit of good news there. Thanks very much, Carrie.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
