I just received a 18 page letter today describing the issue around shareholdersof the MP3.COM (MPPP) stock. During January through March of 2000 I must have traded this stock at least 3-5 times per week... Anyway, I scanned in 2 pages and pasted them below. I thought you may find it interesting.
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
In re MP3.COM, INC. SECURITIES LITIGATION
Master File No.
00-CV-1873-K(NLS)
This Document Relates To:
ALL ACTIONS.
NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION
TO: ALL PERSONS WHO PURCHASED THE COMMON STOCK OF MP3.COM, INC. ("MP3.COM) DURING THE PERIOD JANUARY 13, 2000 THROUGH SEPTEMBER 7, 2000
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION. PLEASE NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENT DESCRIBED IN THIS NOTICE. TO CLAIM YOUR SHARE OF THIS FUND, YOU MUST SUBMIT A VALID PROOF OF CLAIM POSTMARKED ON OR BEFORE AUGUST 9, 2001.
This Notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of California (the "Court"
. The purpose of this Notice is to inform you of the proposed settlement of this class action litigation (the "Litigation" and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the settlement. This Notice describes the rights you may have in connection with the settlement and what steps you may take in relation to the settlement and this class action litigation.
The proposed settlement creates a fund in the principal amount of $34,100,000 in cash and 2,500,000 shares ofMP3.com common stock (collectively, the "Settlement Fund" and will include interest that accrues on the cash portion of the fund prior to distribution. Based on Representative Plaintiffs' estimate of the number of shares entitled to participate in the settlement and the anticipated number of claims to be submitted by Class Members, the average distribution per share would be approximately $0.84 before deduction of Court-approved fees and expenses. However, your actual recovery from this fund will depend on a number of variables including the number of claimants, the number of shares you purchased, the expense of administering the claims process, and the timing of your purchases and sales, if any.
Representative Plaintiffs and Defendants do not agree on the average amount of damages per share that would be recoverable if Representative Plaintiffs were to have prevailed on each claim asserted. The issues on which the parties disagree include: (1) the appropriate economic model for determining the amount by which MP3.com common stock was allegedly artificially inflated (if at all) during the Class Period; (2) the effect of various market forces influencing the trading price ofMP3.com common stock at various times during the Class Period; (3) the extent to which external factors, such as general market conditions, influenced the trading price of MP3 .com common stock at various times during the Class Period; (4) the extent to which the various matters that Representative Plaintiffs alleged were materially false or misleading influenced (if at all) the trading price ofMP3.com common stock at various times during the Class Period; (5) the extent to which the various allegedly adverse material facts that Representative Plaintiffs alleged were omitted influenced (if at all) the trading price ofMP3.com common stock at various times during the Class Period; and (6) whether the statements made or facts allegedly omitted were false, material or otherwise actionable under the federal securities laws.
Counsel for the Representative Plaintiffs believe that the proposed settlement is a good recovery and is in the best interests of the Class. Because of the risks associated with continuing to litigate and proceeding to trial, there was a danger that plaintiffs would not have prevailed on any of their claims, in which case the Class would receive nothing. For example, Representative Plaintiffs faced the possibility that all or many of the claims in this case could have been dismissed in response to motions by Defendants. In addition, the amount of damages recoverable by the Class was and is challenged by Defendants. Recoverable damages in this case are limited to losses caused by conduct actionable under applicable law and, had the Litigation gone to trial, Defendants intended to assert that all or most of the losses of Class Members were caused by non-actionable market, industry or general economic factors. Defendants would also assert that throughout the Class Period the uncertainties and risks associated with MP3. corn's business and financial condition were fully and adequately disclosed.
Representative Plaintiffs' Counsel have not received any payment for their services in conducting the Litigation on behalf of the Representative Plaintiffs and the Members of the Class, nor have they been reimbursed for their out-of-pocket expenditures. If the settlement is approved by the Court, counsel for the plaintiffs will apply to the Court for attorneys' fees of 27.5% of the settlement proceeds and reimbursement of out-of-pocket expenses not to exceed $ 1 50,000.00 to be paid from the settlement proceeds. If the amount requested by counsel is approved by the Court, the average cost per share would be $0.20. The average cost per share could vary depending on the number of shares for which claims are filed.
This Notice is not an expression of any opinion by the Court about the merits of any of the claims or defenses asserted by any party in this Litigation or the fairness or adequacy of the proposed settlement.
For further information regarding this settlement you may contact: Rick Nelson, Milberg Weiss Bershad Hynes & Lerach LLP, 600 West Broadway, Suite 1800, San Diego, CA 92101, Telephone: 800/449-4900. Please do not call any representative ofMP3.com.
A claim will be calculated as follows:
1. For shares of MP3 .com common stock that were purchased on January 13, 2000 through April 2 7, 2000, and
(a) sold prior to April 28, 2000, the claim per share is $0;
(b) sold from April 28, 2000 through July 24, 2000, the claim per share is the lesser of: (i) the purchase price less the sales price, or (li) $4.625;
(c) sold from July 25, 2000 through September 7, 2000, the claim per share is the lesser of: (i) the purchase price less the sales price, or (ii) $6.625; or
(d) retained at the end of September 7, 2000, the claim per share is the lesser of: (i) the purchase price less $5.656, or (ii) $7.157.
2. For shares ofMP3.com common stock that were purchased on April 28, 2000 through July 24, 2000, and
(a) sold prior to July 25, 2000, the claim per share is $0;
(b) sold from July 25, 2000 through September 7, 2000, the claim per share is the lesser of: (i) the purchase price less the sales price, or (ii) $2.00; or
(c) retained at the end of September 7,2000, the claim per share is the lesser of: (i) the purchase price less $5.656, or(ii) $2.532.
3. For shares ofMP3.com common stock that were purchased on July 25, 2000 through September 7, 2000, and
(a) sold prior to September 8, 2000, the claim per share is $0; or
(b) retained at the end of September 7,2000, the claim per share is the lesser of: (i) the purchase price less $5.656, or (ii) $0.532.
The date of purchase or sale is the "contract" or "trade" date as distinguished from the "settlement" date. The determination of the price paid per share and the price received per share, shall be exclusive of all commissions, taxes, fees and charges.
For Class Members who made multiple purchases or multiple sales during the Class Period, the earliest subsequent sale shall be matched with the earliest purchase and chronologically thereafter for purposes of the claim calculations.
The Court has reserved jurisdiction to allow, disallow or adjust the claim of any Class Member on equitable grounds.
In the case of Class Members who would otherwise receive less than 25 shares ofMP3.com common stock in satisfaction of their claim, their claim shall be paid in cash only.
See you in court
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
In re MP3.COM, INC. SECURITIES LITIGATION
Master File No.
00-CV-1873-K(NLS)
This Document Relates To:
ALL ACTIONS.
NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION
TO: ALL PERSONS WHO PURCHASED THE COMMON STOCK OF MP3.COM, INC. ("MP3.COM) DURING THE PERIOD JANUARY 13, 2000 THROUGH SEPTEMBER 7, 2000
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION. PLEASE NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENT DESCRIBED IN THIS NOTICE. TO CLAIM YOUR SHARE OF THIS FUND, YOU MUST SUBMIT A VALID PROOF OF CLAIM POSTMARKED ON OR BEFORE AUGUST 9, 2001.
This Notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of California (the "Court"
. The purpose of this Notice is to inform you of the proposed settlement of this class action litigation (the "Litigation" and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the settlement. This Notice describes the rights you may have in connection with the settlement and what steps you may take in relation to the settlement and this class action litigation.The proposed settlement creates a fund in the principal amount of $34,100,000 in cash and 2,500,000 shares ofMP3.com common stock (collectively, the "Settlement Fund"
and will include interest that accrues on the cash portion of the fund prior to distribution. Based on Representative Plaintiffs' estimate of the number of shares entitled to participate in the settlement and the anticipated number of claims to be submitted by Class Members, the average distribution per share would be approximately $0.84 before deduction of Court-approved fees and expenses. However, your actual recovery from this fund will depend on a number of variables including the number of claimants, the number of shares you purchased, the expense of administering the claims process, and the timing of your purchases and sales, if any.Representative Plaintiffs and Defendants do not agree on the average amount of damages per share that would be recoverable if Representative Plaintiffs were to have prevailed on each claim asserted. The issues on which the parties disagree include: (1) the appropriate economic model for determining the amount by which MP3.com common stock was allegedly artificially inflated (if at all) during the Class Period; (2) the effect of various market forces influencing the trading price ofMP3.com common stock at various times during the Class Period; (3) the extent to which external factors, such as general market conditions, influenced the trading price of MP3 .com common stock at various times during the Class Period; (4) the extent to which the various matters that Representative Plaintiffs alleged were materially false or misleading influenced (if at all) the trading price ofMP3.com common stock at various times during the Class Period; (5) the extent to which the various allegedly adverse material facts that Representative Plaintiffs alleged were omitted influenced (if at all) the trading price ofMP3.com common stock at various times during the Class Period; and (6) whether the statements made or facts allegedly omitted were false, material or otherwise actionable under the federal securities laws.
Counsel for the Representative Plaintiffs believe that the proposed settlement is a good recovery and is in the best interests of the Class. Because of the risks associated with continuing to litigate and proceeding to trial, there was a danger that plaintiffs would not have prevailed on any of their claims, in which case the Class would receive nothing. For example, Representative Plaintiffs faced the possibility that all or many of the claims in this case could have been dismissed in response to motions by Defendants. In addition, the amount of damages recoverable by the Class was and is challenged by Defendants. Recoverable damages in this case are limited to losses caused by conduct actionable under applicable law and, had the Litigation gone to trial, Defendants intended to assert that all or most of the losses of Class Members were caused by non-actionable market, industry or general economic factors. Defendants would also assert that throughout the Class Period the uncertainties and risks associated with MP3. corn's business and financial condition were fully and adequately disclosed.
Representative Plaintiffs' Counsel have not received any payment for their services in conducting the Litigation on behalf of the Representative Plaintiffs and the Members of the Class, nor have they been reimbursed for their out-of-pocket expenditures. If the settlement is approved by the Court, counsel for the plaintiffs will apply to the Court for attorneys' fees of 27.5% of the settlement proceeds and reimbursement of out-of-pocket expenses not to exceed $ 1 50,000.00 to be paid from the settlement proceeds. If the amount requested by counsel is approved by the Court, the average cost per share would be $0.20. The average cost per share could vary depending on the number of shares for which claims are filed.
This Notice is not an expression of any opinion by the Court about the merits of any of the claims or defenses asserted by any party in this Litigation or the fairness or adequacy of the proposed settlement.
For further information regarding this settlement you may contact: Rick Nelson, Milberg Weiss Bershad Hynes & Lerach LLP, 600 West Broadway, Suite 1800, San Diego, CA 92101, Telephone: 800/449-4900. Please do not call any representative ofMP3.com.
A claim will be calculated as follows:
1. For shares of MP3 .com common stock that were purchased on January 13, 2000 through April 2 7, 2000, and
(a) sold prior to April 28, 2000, the claim per share is $0;
(b) sold from April 28, 2000 through July 24, 2000, the claim per share is the lesser of: (i) the purchase price less the sales price, or (li) $4.625;
(c) sold from July 25, 2000 through September 7, 2000, the claim per share is the lesser of: (i) the purchase price less the sales price, or (ii) $6.625; or
(d) retained at the end of September 7, 2000, the claim per share is the lesser of: (i) the purchase price less $5.656, or (ii) $7.157.
2. For shares ofMP3.com common stock that were purchased on April 28, 2000 through July 24, 2000, and
(a) sold prior to July 25, 2000, the claim per share is $0;
(b) sold from July 25, 2000 through September 7, 2000, the claim per share is the lesser of: (i) the purchase price less the sales price, or (ii) $2.00; or
(c) retained at the end of September 7,2000, the claim per share is the lesser of: (i) the purchase price less $5.656, or(ii) $2.532.
3. For shares ofMP3.com common stock that were purchased on July 25, 2000 through September 7, 2000, and
(a) sold prior to September 8, 2000, the claim per share is $0; or
(b) retained at the end of September 7,2000, the claim per share is the lesser of: (i) the purchase price less $5.656, or (ii) $0.532.
The date of purchase or sale is the "contract" or "trade" date as distinguished from the "settlement" date. The determination of the price paid per share and the price received per share, shall be exclusive of all commissions, taxes, fees and charges.
For Class Members who made multiple purchases or multiple sales during the Class Period, the earliest subsequent sale shall be matched with the earliest purchase and chronologically thereafter for purposes of the claim calculations.
The Court has reserved jurisdiction to allow, disallow or adjust the claim of any Class Member on equitable grounds.
In the case of Class Members who would otherwise receive less than 25 shares ofMP3.com common stock in satisfaction of their claim, their claim shall be paid in cash only.
See you in court
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