SAN DIEGO & PHOENIX--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of Mesa Air Group, Inc. (NASDAQ: MESA) filed a class action complaint against the Company for alleged violations of the Securities Act of 1933 pursuant to the company's August 2018 initial public offering ("IPO"). Mesa operates as the holding company for Mesa Airlines, Inc., which provides regional air carrier services with American Airlines and the United Airlines.
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Mesa Air Group, Inc. (MESA) Accused of Misleading Shareholders
According to the complaint, Mesa held its IPO on August 14, 2018, offering approximately 11 million shares at $12.00 per share for gross proceeds of approximately $115.56 million. In its Registration Statement, Mesa touted its "competitive cost structure" and "track record of reliable performance." However, in February 2019, Mesa revealed that "a year ago" American Airlines had talked to the Company about raising its performance levels and Mesa admitted its "performance levels were certainly far below that which the industry is currently operating," but assured it was addressing the issues and increasing performance requirements for its American Airlines capacity purchase agreement ("CPA"). Contrary to assurances, on August 9, 2019, Mesa revealed it "did not meet the performance criteria" required under the American CPA. Consequently, American elected to remove four of Mesa's aircrafts from the CPA, thereby decreasing the number of guaranteed revenue-generating aircrafts operated by Mesa for American. Since this news, Mesa's share price has plummeted, currently trading at around $3 per share, representing a staggering 74% decline from its IPO price.
Mesa Air Group, Inc. (MESA) Shareholders Have Legal Options
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