Stockholders v Ambassadors Group Inc.
Stockholders File Lawsuit Against Ambassadors Group Inc.
Class Action Complaint For Violation Of Federal Securities Laws
According to the press release dated July 14, 2009, the complaint charges Ambassadors Group and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Ambassadors Group is an educational company that organizes and promotes international and domestic travel programs for youth, athletes, and professionals.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Companys business prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the Company was experiencing a lower conversion rate from people attending its informational meetings to booking travel; (b) that there was a decrease in the number of enrolled participants for the Company's 2008 travel programs, especially in its international outbound programs; (c) that the Company had utilized a different database in order to promote its travel programs to prospective clients; and (d) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects. As a result of defendants false and misleading statements, Ambassadors Group stock traded at artificially inflated prices during the Class Period, reaching a high of $40.99 per share on October 18, 2007.
Then, on October 22, 2007, Ambassadors Group announced its financial results for the third quarter of 2007, the period ending September 30, 2007. For the quarter, the Company reported net income of $22.5 million and $1.12 fully diluted earnings per share. The Company also announced that as of October 16, 2007, its net enrolled participants for 2008 travel programs were 26,200 compared to 37,300 participants as of the same date last year for its 2007 programs and that the decrease in net enrollments for its 2008 programs will negatively impact its 2008 earnings. In response to this announcement, the price of Ambassadors Group common stock fell $17.73 per share, or approximately 44%, to close at $21.04 per share.
If you bought Ambassadors Group Inc. securities and would like to obtain information about the Ambassadors Group Inc. lawsuit, then you are invited to call Kahn Swick Foti, LLC toll free at (866) 467-1400 to speak with an attorney or visit www.ksfcounsel.com.
