The Getswift Ltd (ASX:GSW) share price fell another 41% to $0.55c today, following receipt of a lawsuit this morning. Another 19 million shares changed hands so far today in a very big day of trading. It has been a shocking ride down for holders, with shares plunging 55% on Monday, 28% yesterday, and a further 41% today to be down 82% this week alone:
As foreshadowed by Fairfax media yesterday, Getswift today confirmed that it had been served with the Squire Patton Boggs' class action.
The company said that it "intends to contest this action and legal counsel has been engaged." Even if the lawsuit is drawn out or unsuccessful, the lawyer fees are likely to have a significant impact on Getswift's current $96 million cash balance.
With shares so low, maybe it's time to go bargain hunting? I'm not so sure.
Even though Getswift has around 45 cents per share in cash – theoretically placing a floor on the share price – the lawsuit places that cash at risk. On top of that, less than 50% of Getswift's contracts are currently generating revenue, and revenues themselves are minimal, so the value of the business itself is very unclear. I would continue to avoid the company entirely.
