Stockholders v Vistacare, Inc.
Vistacare Stock Declines After Press Release
Several class actions have been filed against hospice operator Vistacare, Inc. (Nasdaq:VSTA), and certain of its officers and directors by stockholders who purchased the company's common stock between November 6, 2003, and August 5, 2004. The actions claim 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.
The complaint alleges that, throughout the applicable period, Vistacare reported record revenue and overall growth and profitability in publicly-disseminated press releases and SEC filings, and forecasted positive earnings and revenue targets. The defendants allegedly reported quarter after quarter of record financial growth because they failed to properly reserve Medicare reimbursements. On August 5, 2004, after the close of trading, the company issued a press release announcing second quarter financial results for the quarter ending June 30, 2004. The release announced that results for the quarter were impacted by the company's decision to accrue $6.2 million in the quarter for its Medicare cap reserve. This news caused a decline in Vistacare's share price from a closing price of $18.72 on August 5, 2004, to $15.28 on August 6, 2004, for a one-day decline of over 18%.
If you purchased securities issued by Vistacare during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 11, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.
