A shareholder class action lawsuit alleges that KIT Digital (NASDAQ: KITD) violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission. The complaint, filed in the United States District Court for the Southern District of New York, asserts that KIT Digital and certain of its senior executives issued false and misleading information to investors between November 8, 2011 through May 3, 2012 (the “Class Period”), resulting in an inflated stock value during the time period.
Specifically, the lawsuit claims KIT Digital misled investors over the effectiveness of the integration of several recently purchased companies and its financial outlook. The lawsuit also claims that the company overstated its foreseeable growth and profitability, and had falsely stated that it was on the path to achieve significant financial success.
On May 3, 2012, the online video software maker reported preliminary first-quarter revenue of $59 million compared to its own and analyst estimates of $72.4 million. The company cited a longer-than-anticipated sales cycle “for a number of larger opportunities” and higher costs of integrating and administering recent acquisitions. In reaction to the missed estimates, KIT Digital stock fell 30.28% to $4.42 per share, wiping out more than $80 million in market capitalization.
If you purchased shares of KIT Digital between November 8, 2011 and May 3, 2012, you may file a motion with the court no later than July 25, 2012, and request that the court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the court must decide that your claim is typical of the claims of other class members and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by your decision of whether or not to serve as a lead plaintiff. You can recover as an absent class member without moving for lead plaintiff. The action discussed here was not filed by Milberg.
Milberg LLP has represented individual and institutional investors for over four decades and serves as lead counsel in Courts throughout the United States. Visit the Milberg website (www.milberg.com) for more information about the firm. If you wish to discuss this matter with us, please fill out the form on the right or contact the following attorney:
Andrei Rado, Esq.
One Pennsylvania Plaza, 49th Fl.
New York, NY 10119-0165
Phone number: (800) 320-5081
Milberg LLP has been representing consumers and investors for more than four decades and serves as lead counsel in federal and state courts throughout the United States.
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