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Thread: Investor files class action lawsuit against Mesa Air

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    Investor files class action lawsuit against Mesa Air


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    By Brandon Brown – Reporter, Phoenix Business Journal
    Apr 12, 2020, 8:00pm EDT
    An investor has filed a class action lawsuit against Mesa Air Group, claiming the company gave either false or misleading statements before it went public in August 2018.

    The lawsuit, filed in the U.S. District Court of Arizona on April 1, was brought by David Lowthorp, who acquired 84 shares of Mesa Air (Nasdaq: MESA) between 2018 and 2020. Phoenix law firm Tiffany & Bosco and New York-based the Rosen Law Firm are representing Lowthorp and are looking for other investors to join the suit.

    Phoenix-based Mesa Air Group is the parent company of Mesa Airlines, a regional carrier that operates flights for both American Airlines (Nasdaq: AAL) and United Airlines (Nasdaq: UAL).

    Mesa Air’s initial public offering went for $12 per share, with the stock reaching a high above $15 a month after the IPO. Since, then, the stock price has gradually declined, reaching a low of $2.05 earlier this month. The shares closed at $3.98 Thursday ahead of the Good Friday holiday. Follow the stock here.

    While Mesa, along with a number of other airlines, has seen their stock prices falter as airlines face the brunt of travel stoppages and stay-at-home orders in the wake of the coronavirus outbreak, Mesa Air had reported some of its best performance numbers to date from November 2019 through February of this year, the month before the effects of COVID-19 hammered the travel industry.

    The lawsuit alleges the IPO price was inflated because company officials misrepresented the airline’s status.

    'Suffered significant losses'
    According to court documents, the claims against Phoenix-based Mesa Air include that despite what the company said in its IPO documents, Mesa Air’s operational performance was poor and below industry standards, the company lacked qualified mechanics and it had an inadequate number of spare aircraft and parts.

    Mesa Air officials have not yet responded to a request for comment about the lawsuit.

    During the past year, Mesa Air has run into numerous difficulties with its American Airlines operations. After not meeting a number of operational expectations with the company, American has removed several Mesa aircraft from its rotation.

    The lawsuit alleges Mesa Air officials had to be aware these difficulties existed beforehand, along with others problems with the company and the industry, but either lied or did not disclose the full details at the time of the IPO.

    “As a result of [Mesa Air’s] wrongful acts and omissions, and the precipitous decline in the market value of the company’s securities, [investors] have suffered significant losses and damages,” Lowthorp said in the lawsuit.

    Besides suing the company, the class-action also names 10 individuals, mostly Mesa Air executives and board members, as well as six investment banking firms that acted as underwriters to the Mesa Air IPO. The claim is the underwriter defendants did not do their due diligence before supporting Mesa and its IPO.

    The lawsuit did not list a specific amount of money investors are asking for. The investors are asking for the case to be heard in front of a jury trial.

    Other Mesa Air investors have until June 1 to join the suit against Mesa Air.

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    The lawsuit alleges Mesa Air officials had to be aware these difficulties existed beforehand, along with others problems with the company and the industry, but either lied or did not disclose the full details at the time of the IPO.

    “ but either lied or did not disclose the full details at the time of the IPO.”

    They never lie, they just don’t disclose the full details at the time.

    S.O.P.

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    'Suffered significant losses'

    84 shares x $12 = $1008. What are the current and anticipated costs of this lawsuit? Did you believe "Masa Air" was your diamond in the rough with a great ROI?

    p.s. Don't quit your day job.

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