Class Action Lawsuit Filed Against Virgin Mobile USA
Published on: 1st Jan 2008
Note -- this news article is more than a year old.
US law firm and serial class action litigators, Zwerling, Schachter & Zwerling have filed a class action lawsuit against Virgin Mobile USA relating the MVNO's stock market floatation last October.
The complaint alleges that the Company's Registration Statement and Prospectus filed with the SEC on or about October 10, 2007 contained statements that were materially false and misleading, or omitted to state other facts necessary to make the statements made not misleading, because: (1) the Company had already suffered a larger than expected third quarter loss for the period ended September 30, 2007; (2) the Company was experiencing weakening demand for its services at the time of the IPO; (3) the Company's cost structure at the time of the IPO was too high for the Company to operate profitably; and (4) that, as a result of the foregoing, the Registration Statement/Prospectus was materially false and misleading.
On November 15, 2007, approximately one month after the IPO, Virgin Mobile announced earnings for the three month period ended September 30, 2007. The Company reported that its third-quarter loss widened to $7.3 million, compared with a loss of $5.1 million in the year-ago quarter. The Company also reported a pro-forma loss of $.15 cents per share, compared with a loss of $.10 cents per share in the year-ago period. As of November 16, 2007, shares of the Company's common stock had declined to $9.19 per share.
The law firm is seeking a "lead plaintiff" to launch the lawsuit.