Stockholders v Electronic Arts Inc. (EA)
Stockholders Sue Electronic Arts Inc.
A class action has been filed against Electronic Arts Inc. (EA), (NasdaqNM:ERTS), certain of its officers and directors by stockholders who purchased the company's common stock between January 25, 2005 and March 21, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
Electronic Arts Inc. develops, markets, publishes and distributes interactive software games that are playable by consumers on platforms, including home videogame machines, such as the Sony PlayStation 2, Microsoft Xbox, Nintendo GameCube and Sony PlayStation consoles; personal computers (PCs); handheld game machines, such as the Game Boy Advance, and online, over the Internet and other online networks.
According to a press release dated March 28, 2005, the complaint charges EA and certain of its officers with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that increased competition from its competitors was eroding EA market share; (2) that hardware shortages were material; (3) that EA continued to suffer from operating margin compression; and (4) that as a result of the above, the Company's statements about its financial performance were lacking in any reasonable basis when made. The complaint further alleges on or around March 21, 2005, after the market closed, EA announced revised estimates for the Company's fiscal year ending March 31, 2005. News of this shocked the market. Shares of EA fell $11.20 per share or 16.88 percent, on March 22, 2005, to close at $55.15 per share.
If you bought Electronic Arts Inc. (EA) securities between January 25, 2005 and March 21, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.
