Valassis, Insignia Stock Jumps on News America Marketing Group Settlement
Since News America Marketing Group bought Floorgraphics Inc. in what appeared to be a legal settlement of the corporate spying and sabotage litigation between them, the stock of two other direct marketing companies, Valassis and Insignia Systems, has gone through the roof.
Valassis, which has a much larger case pending against News America, went from just above $1 to $1.70 (see graph) — not much in real money terms but a 70 percent increase if you bought right before the trial started. Insignia has gone from under $1 to $2 (see graph).
The news offers the hope that Valassis’s stock will not be delisted by NYSE for trading too low. Back in the good old days of 2005, Valassis traded at $40.
Valassis, Insignia and FGI all have the same things in common: They all alleged that News America signed up their clients into anticompetitive contracts and spread lies in the marketplace about them. FGI and Insignia both alleged that News America offered to buy their companies, and when they declined set about trying to destroy them.
The settlement and acquisition of FGI by News America raises the probability that Valassis may succeed in its trial (paving the way for a jackpot jury verdict in favor of Valassis) or that News America may offer to buy Insignia in a similar settlement to FGI’s.
Either way, victory would cause both companies’ stock to jump even higher.
- See BNET’s previous coverage of the in-store marketing wars:
- Valassis CEO Got Big Raise Despite Company’s Losses
- News America Marketing Group Wins Summary Judgment Against Whistleblower Robert Emmel
- News America Marketing Group Buys Floorgraphics Just Hours After Settling Spying Lawsuit
- News America Marketing Group Settles With Floorgraphics; Valassis, Insignia Likely Rejoicing
- Valassis May Not Be Able to Pay Debt; Litigation May “Materially Harm” the Company
- Trial: Did News America Marketing Group Break Into Floorgraphics’ Computers?
- Valassis Stock Threatened With De-listing by NYSE
- Valassis’ Plan to End Newspaper Coupons Outrages Middle America
- Valassis Suit vs. News America Being Conducted in Secrecy
- Valassis: Layoffs Will Continue as It Reduces Newspaper Coupon Business; It’s All News America’s Fault
- Valassis Writes Down $245 Million in Assets; Legal Bills Running at 10% of Profits
- Valassis Angers Blogger Moms by Yanking RedPlum Coupons From Newspapers
- Valassis Reduces the Cost of Fun for Employees
- Direct Mail Giant Valassis Is “Not Paying Its Bills”; Stock Is “Worth $0”
- Alloy Beats WPP, IPG et al in Network Efficiency Ranking
- The Cost of Valassis’ Suit vs. News America Is Eating Its Profit
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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