Ipo Assignment
David Fore
IPO Assignment
The company that I chose to do my assignment on is Life lock. I know everyone has seen the commercials on television and that they are an extremely popular company. It is a company that promises to protect anyone from identity theft for simply twenty five dollars per month. They recently had their initial public offering. It will a little strange because the company was fined 12 million dollars a couple of years back for making false claims to American consumers.
Their IPO didnt go as they expected though. The Tempe, Ariz., company dropped 30 cents, or 3.2 percent, to $8.70 in morning trading on Wednesday. The shares opened at $8.38, down 7 percent from the $9 per share that the initial public offering was priced at. The broader markets were mostly higher. The fine that the Federal Trade Commissions fine in 2010 hurt the companys image more than they anticipated. The FTC said that Life lock, which advertises itself as “#1 In Identity Theft Protection,” engaged in false advertising by promising customers that if they signed up with its service their personal information would become useless to thieves.
The FTC accused the company of using scare tactics to customers. They made customers feel that if they didnt get their identification protected then their information would be available for public use. Identity theft has been the most reported consumer complaint in the U.S. for the past 12 years, according to the Federal Trade Commission. In 2011, roughly 11.6 million U.S. adults, nearly 5% of the adult population, claimed identity fraud, which cost consumers and businesses roughly $18 billion, according to Javelin Strategy & Research, a customer-transaction and payments-research firm.