The Rosen Law Firm today announced that a class action lawsuit has been filed on behalf of purchasers of China Natural Gas, Inc. common stock during the period from March 10, 2010 through August 19, 2010. CHNG was trading over $10 a share in beginning of the period. Since then the stock has declined over 50% (or 110 MUSD in market value) so the potential damages are quite huge compared to the remaining market price and book value of the company.
Shortly after seeing this announcement I dumped all my shares in CHNG.
I happen to be one of the people that purchased the stock during that period so I need to consider whether I want to participate in the lawsuit. My largest purchase was on the 20th of August so that won't qualify. At any rate I don't want to stick around while other people loot the company via the lawsuit especially if I won't qualify for it or have other reasons not to participate.
Even though I increased position in CHNG fairly recently, I did that without fully understanding the underlying problems in CHNG and similar stocks. These problems are fairly well summarized in the following arcticle:
Here you can find the Barron's article + some commentary in the end:
I feel like a sucker. But this will teach me one more lesson. It's not the first time and won't be the last... Such is life..