Alliance MMA Inc (NASDAQ: AMMA) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has settled class action litigation, leading to excitement among investors and sending the stock screaming for the top. Today, we’ll talk about the settlement news, what we’re seeing from the stock, and what we’ll be watching for with regard to AMMA ahead.
AMMA Rockets On Settlement
As mentioned above, Alliance MMA is having an incredibly strong day in the market today after announcing a settlement. In a press release issued early this morning, the company announced that it has agreed to settle and resolve a stockholder class action lawsuit that was filed by back in April of 2017. The suit was filed against AMMA, some of its current and former officers and directors, and the underwriters in the company’s IPO.
Under the terms of the settlement agreement, AMMA will be will be covered in full by its D&O insurer. Alliance MMA’s sole financial responsibility with respect to the settlement will be to pay costs and expenses up to the policy deductible amount of $250,000. According to the company’s release, it has already paid $137,761 toward that deductible by way of legal fees. In a statement, Bob Mazzeo, CEO at AMMA, had the following to offer:
Given the circumstances in which Alliance found itself, we couldn’t be more pleased with the outcome… While it remains our view that Alliance did not violate any laws in conducting its initial public offering, settling this case on the terms agreed by the parties is clearly in the best interest of our stockholders.
This settlement represents a fresh start for Alliance and provides the new management team with a renewed opportunity to leverage our relationships and build strategic partnerships that we believe will help drive revenues for years to come. At the same time, we will continue implementing our plan to streamline the operation of the business and reduce our expenses as we advance toward profitability.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. After all, with the settlement in mind, Alliance MMA can now move on without the worry of further legal costs and more wasted time. So, it’s no surprise to see that the stock is making a run for the top in the market today. Currently (10:01), AMMA is trading at $0.68 per share after a gain of $0.14 per share or 25.15% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMMA. In particular, we’re interested in following the moves made by the new management team in the months ahead. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!