Ebola Solution Pump & Subsequent Investor Litigation

This interesting tid-bit comes to us from LitigationDaily (which sounds like a depressing website as it appears its entire purpose is to report on sad, but true class-action lawsuits). It’s the story of the biotech firm, iBio, Inc. the Delaware firm whose experimental Ebola drug called ZMapp was hyped-up last week when drug makers announced the drug would begin producing the drug in large quantities. After SeekingAlpha quickly debunked the myth that the ZMapp product would be the eventual cure-all for the impending doom of Ebola’s massive spread. Shares of iBio, Inc. subsequently tanked and the litigation quickly followed.  The law firm in the suit is currently recruiting plaintiffs who purchased shares between October 13th and October 23rd–during a time of massive Ebola hysteria that helped to pump the price of the stock.

The complaint claims iBio made misleading statements about the ZMapp product to ensure shares were increased. Whether this is true or not is still a matter of debate and will be up to the Delaware judge to decide. It appears that some investors may simply have gotten caught up in the Ebola hysteria and iBio just happened to have a product that was tied to the virus–even if in an circumstantial way. It would appear some fault may be on iBio, but that investors may have drawn too many conclusions and pumped the stock up in the process. Any company tied to a hysteria-laden disease like Ebola would certainly need to take the utmost of care in what they say regarding what they’re doing to ensure such lawsuits don’t overly hamper the company’s ability to continue operations.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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