What happened
Shares of IDT Corporation (IDT -0.44%) are up 22% this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, following a favorable ruling dismissing a class action lawsuit against the company.
So what
To be sure, virtually all of IDT's pop this week came on Tuesday after a Delaware court dismissed all claims against IDT in a suit brought on behalf of prior stockholders of former IDT subsidiary Straight Path Communications. Straight Path was previously spun off from IDT in 2013, and then sold to Verizon for $3.1 billion in 2017. The lawsuit, which was filed in 2017, alleged that the company aided and abetted Straight Path's chairman and CEO in an effort to force an unfair settlement of claims between Straight Path and IDT at the time of the sale.
When all was said and done, however, the court found that the settlement actually exceeded the value of those claims. As a result, it says there was no harm to Straight Path shareholders as alleged in the suit.
Now what
To be clear, this isn't technically over just yet; the plaintiffs still have 30 days from the entry of the final order to file an appeal. But this is obviously a crushing blow to the plaintiffs after what was surely a frustrating yearslong process. For now, IDT shareholders are rightly relieved by the verdict, and the leading communications stock is responding in kind.
