BALA CYNWYD, Pa., Feb. 13, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Northern District of Texas, Dallas Division on behalf of all purchasers of the common stock of Blockbuster, Inc. (NYSE:BBI) ("Blockbuster" or the "Company") from April 24, 2002 and December 17, 2002, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges Blockbuster, Inc. and certain of its officers and directors with issuing false and misleading statements concerning its business and financial conditions. Specifically, the complaint alleges that throughout the Class Period, as alleged in the Complaint, defendants issued numerous positive statements regarding the Company's financial performance and its future prospects. The Complaint alleges that these statements were each materially false and misleading when made as they misrepresented and/or omitted the following adverse facts which then existed and disclosure of which was necessary to make the statements made not false and/or misleading, including: (a) that Blockbuster's business was being negatively impacted by declining DVD sale prices. As the prices of DVDs declined, consumers began to purchase DVDs from a variety of retail outlets, instead of renting them, thereby causing Blockbuster to experience declining rental sales; (b) that Blockbuster was unable to effectively compete with other retailers of DVDs as many of those retailers offered DVDs as loss leaders -- selling the DVDs below or at cost -- in order to entice shoppers into the store. As a result, Blockbuster was experiencing declining DVD sales as it lost sales to mass merchandisers; (c) as a result of (a) and (b), growth at stores that were open for more than one year was slowing to such an extent that the same-store growth rates that defendants had promised investors would not be realized; (d) that Blockbuster was experiencing problems with certain of the movie studios with whom it had profit-sharing arrangements. In particular, Blockbuster was being accused by Buena Vista of breaching the terms of its revenue sharing agreement with it. After the Class Period, Buena Vista brought suit against Blockbuster for $120 million and alleged breach of contract; and (e) as a result of the foregoing, defendants' lacked a reasonable basis for their earnings projections and positive statements about the Company at all times.
On December 18, 2002, Blockbuster shocked investors when it slashed its earnings estimates and cut its growth rate for same-store sales and attributed the revisions to the negative impact of lower DVD prices which was increasing sales of DVDs and decreasing rentals. In response, the price of Blockbuster common stock declined precipitously, falling from $19.40 per share to $13.64 per share on extremely heavy trading volume. Prior to the disclosure of this adverse information to the market, the Individual Defendants and certain other high-level executives of Blockbuster sold their personally-held Blockbuster common stock to the unsuspecting public, reaping proceeds of more than $25 million.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, LLP, which prosecutes class actions on behalf of investors and shareholders. For more information on Schiffrin & Barroway, or to sign-up to participate in this action online, please visit http://www.sbclasslaw.com/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than April 14, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca