Lawyers frequently target public companies on behalf of investors when there’s bad news that impacts their stock price, sometimes it seems purely by reflex.
That’s what’s happening to eBay after PayPal revealed in its earnings release last week that it experienced “softness” in its eBay business.
Analysts and investors worried that what PayPal experienced could be an indication of eBay’s overall performance in the third quarter, leading to a drop in eBay’s share price.
Hagens Berman Sobol Shapiro LLP issued a press release today that it was conducting an “investigation of possible disclosure violations,” stating in part:
“On October 19, 2018, an analyst reportedly downgraded eBay shares from Buy to Hold, cut the target from $43 to $35, and cited PayPal’s earnings release disclosing weak Q3 gross merchandise value (“GMV”) trends for eBay. This news drove the price of eBay shares down $2.80, or almost 9%, to close at $28.75 that day.”
The press release quoted Hagens Berman partner Reed Kathrein: “We’re focused on investors’ losses, eBay’s upcoming earnings report and whether management may have made earlier statements about the Company’s business that could have been misleading.”
Hagens Berman may simply be on a fishing expedition; it sought help from would-be whistleblowers, reminding them of the SEC reward program.
Stay tuned – eBay reports third-quarter earnings Tuesday afternoon.