Opinion ID: 1782194
Heading Depth: 4
Heading Rank: 4

Heading: IPO in 2000

Text: Blackmon claims that the Nexity defendants misrepresented the likelihood that Nexity would conduct an IPO in 2000. He argues that Nexity had not hired an investment advisor or otherwise prepared to conduct an IPO when it represented that it anticipated conducting an IPO. Thus, Blackmon argues, the Nexity defendants materially misrepresented that Nexity would conduct an IPO when there was no such prospect. Although the POM and Ken Vassey, a Nexity officer, may have indicated that Nexity expected to conduct an IPO in the latter part of 2000, the POM also contained explicit warnings that such an IPO might never occur. The POM stated that no decision regarding such offer has been made . . . [and] [t]here is no assurance that a public offer can be made on terms . . . acceptable to Nexity. Thus, Nexity pointed out that its stock might not be traded publicly and that, if it were not, the investors will be limited in their ability to resell shares. These cautionary statements directly relate to the alleged misrepresentation at issue. Nexity's statements regarding the possibility of conducting an IPO in context with these cautionary statements would not have misled a reasonable investor. See P. Stolz Family P'ship L.P. v. Daum, 355 F.3d 92, 98 (2d Cir.2004)(holding that cautionary statements neutralized any misrepresentations regarding future IPOs); Halperin v. eBanker USA.com, Inc., 295 F.3d 352, 357-58 (2d Cir.2002)(holding that representations and omissions must be considered together and in context to determine whether they affect the total mix of information and mislead a reasonable investor). Therefore, any representation by Nexity and its officer, Ken Vassey, regarding the possibility of an IPO is, as a matter of law, not material.