Opinion ID: 778688
Heading Depth: 2
Heading Rank: 1

Heading: The NetRadio Hype

Text: 6 The amended complaint sets forth many public statements made by Navarre regarding the NetRadio IPO during the class period. The investors pinpoint the following statements and allege that the defendants, in each instance, knew or were reckless in not knowing that the statements were false: 7 (1) In November 1998, Navarre began making public statements that it would complete the NetRadio IPO by the end of the year 1998, which created heightened demand for Navarre stock. Investors also allege that Paulson said the IPO would happen soon. 8 (2) On November 27, 1998, after Paulson allegedly confirmed efforts to sell NetRadio shares in a public offering, the price of Navarre stock more than doubled to $12.1875. 9 (3) On November 30, 1998, a transcript from CNNfn states [t]he company has publicly admitted that it is working to bridge NetRadio out as an IPO before the end of the year. Spoke with a company spokesmen [sic] who did confirm that the company is trying to bring the IPO out. The identity of the speaker was not disclosed by CNNfn. 10 (4) On December 8, 1998, a Navarre spokeswoman confirmed that Navarre would spin off NetRadio, but said Navarre had not yet registered a filing with the SEC. 11 (5) On December 9, 1998, Paulson told a reporter with CNBC that in order to spin off NetRadio in an IPO, Navarre would have to file documents with the SEC and may need shareholder approval. Additionally, Paulson announced Navarre had retained Everen Securities, Inc. to complete the IPO within 60 days. 12 (6) In December 1998 or January 1999, rather than correcting the information, Paulson held a conference saying he was reasonably comfortable that the NetRadio IPO would occur by early February. Navarre stock traded above $15 per share at that time. 13 (7) On February 3, 1999, a story from the Minneapolis Star Tribune stated that Navarre was expected to file a registration statement with the SEC early the following week. A spokesman for Navarre declined to comment. Navarre stock surged to at or above $20 per share. 14 (8) On February 8, 1999, Navarre retreated from the previous announcement but still confirmed plans for an IPO within the next several weeks. 15 (9) On March 3, 1999, NetRadio filed a registration statement but the investors allege that Navarre stopped discussing the IPO altogether at that time and Navarre's stock began a downward trend beginning in late May 1999. 16 (10) By June 4, 1999, Navarre stock traded at $9 per share. Navarre's June 29, 1999, 10-K reported that there can be no assurance that [NetRadio] will successfully complete the offering. 17 (11) On July 26, 1999, Navarre disclosed that the NetRadio IPO would not occur before September and that Navarre was interviewing new investment bankers to replace Everen Securities, which was in the midst of its own pending acquisition announced April 27, 1999. The investors allege that at that time Everen Securities had completed almost no work on the NetRadio IPO. 18 (12) NetRadio ultimately completed its IPO on October 14, 1999.