Will first law firm to go public face a shareholder suit? Stock prices seesaw with whiplash plan
Share prices of the world’s first publicly owned law firm lost 65 percent of their value last Thursday and Friday, but prices partially recovered this week.
The share price for Australian personal injury firm Slater & Gordon fell after the United Kingdom announced a crackdown on whiplash fraud, report the Sydney Morning Herald, Sky News Australia and Financial Times. The share price rose 34 percent on Monday, however, after the law firm reaffirmed revenue expectations for 2016.
The stock price plummeted last week after the U.K. government announced it planned to raise the threshold for whiplash payouts from $2,000 to $10,500, CNBC and the Herald Sun previously reported. (The articles are apparently using Australian currency, which translates to $1,442 to $7,571 in U.S. currency.) Those with minor whiplash claims would instead be offered physiotherapy. The whiplash changes won’t take effect until at least 2017.
After the initial drop in share prices, the Herald Sun reported that rival law firms were “monitoring the chaos to decide whether there is a case for a shareholder class action.”
Slater & Gordon prices hit a 12-month high of $7.85 on April 2, which translates to $5.66 in U.S. currency. On Monday, share prices closed at about 92 cents, which translates to 66 cents in U.S. currency. Slater & Gordon acquired a U.K. insurance claims processor for more than $1 billion last spring.
Among those taking a hit by falling stock prices is the law firm’s managing director Andrew Grech, who holds about 2 percent of the law firm’s stock.