Value Microcaps Motherboard

[micham2012]

stanu78 re HOM:

Yes, it is the standard response, and the only one available to the company. But class actions almost always settle, after much is spent on attorneys fees. The relevant question is always whether the tab to defend and then settle is covered by insurance or not. The only reason for my comment is that this litigation appears to have enough horsepower that it will probably be around for a while, and the ultimate settlement will probably be for more than nuisance value. It is my consistent policy to sell stock in these small companies whenever this kind of thing happens. At best the litigation is a huge distraction that can cause a small company to lose focus. Here, even if there is insurance, it will be interesting to see if the insiders are provided a defense by the insurers. I gather they are important players in the company, and it is conceivable that the SEC is looking at the trades.

But hey, if HOM does have good insurance, and if earnings are good this quarter, it is certainly possible that the stock can power higher. Personally, I would not stick around to find out.

Steve