Shareholders File Suit Against Virgin Mobile USA
Shareholders who lost money after investing in Virgin Mobile USA's IPO and stock have filed a class action lawsuit against the mobile service provider, Kahn Gauthier Swick said on Wednesday.
Kahn Gauthier Swick, which filed the suit on behalf of the shareholders, said it is urging investors who lost more than $100,000, to inquire about applying for lead plaintiff status in the case.
The shareholders invested in Virgin Mobile USA's initial public offering last month, or bought its stock later in the open market.
Last month, the pay-as-you-go mobile service provider that focuses on the youth market sold 27.5 million shares for $15 each, at the low end of expectations.
The offering raised $412.5 million. The company had said it would use the proceeds from the stock sale to repay debt and to buy out 16.7 percent of Sprint Nextel's interest.
Virgin Mobile USA has racked up more than $600 million in losses since it began operations in 2002.
The stock, which rose to as high as $16.63 a share on its first day on the open market, has fallen nearly 55 percent from that peak through Tuesday's close.
Its shares ended Tuesday's trading session on the New York Stock Exchange down 67 cents at $7.52 a share.