Dollars to doughnuts, we said on Monday that a nuisance shareholder class action was being cooked up by Compaq Computer Corp (CI No 1,676), and it has duly turned up: two holders are suing the company, chairman Ben Rosen and chief executive Rod Canion alleging that they deceived investors and inflated the share price by issuing a series of optimistic statements about the company’s prospects in late 1990 and early this year; the suit in particular alleges that Compaq failed to disclose that it was overloading dealer distribution channels with excessive inventory in an effort to inflate reported sales and earnings and that it lacked sufficient and adequate foreign currency hedging mechanisms; it charges the officers that they sold large amounts of Compaq stock during the period while in possession of material adverse information.
