BALA CYNWYD, Pa., March 11, 2003 (PRIMEZONE) -- Law offices of Brodsky & Smith, LLC today announces that a securities class action lawsuit has been filed on behalf of shareholders who purchased the common stock and other securities of Alloy, Inc. ("Alloy" or the "Company") (Nasdaq:ALOY) between August 1, 2002 and January 23, 2003, inclusive (the "Class Period").
The case is pending in the United States District Court for the Southern District of New York against the company and certain of its officers and directors. Alloy is a teen-focused media company and direct marketer that targets Generation Y consumers, i.e. the approximately 60 million people in the United States between the ages of 10 and 24. The complaint alleges that by issuing a series of materially false and misleading statements to the market regarding Alloy's business and financial condition, between August 1, 2002 and January 23, 2003, defendants Alloy, Matthew C. Diamond (CEO), James K. Johnson Jr. (President and COO) and Samuel A. Gradess (CFO) violated the Securities Exchange Act of 1934.
The complaint alleges that Alloy claimed that its merchandising and advertising segments complemented one another in a way that gave it an edge over competing teen retailers and media businesses, thus enabling it to succeed despite difficult market conditions in the second half of 2002. Alloy failed to advise investors, however, that the Company faced fierce competition for the youth market and the weak economy had forced it to cut its prices and increase operating expenses, e.g. by offering free shipping and deep discounts, thereby eroding Alloy's gross profit margin.
On January 23, 2003, the Company shocked the market by announcing that EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11 million to $12 million instead of the previously projected $15 million to $16 million and that fiscal 2002 EBTA would be in the range of $30 to $31 million instead of the previously forecast $34 million to $38 million. On this news, the Company's share priced plummeted by 49%, or $4.57, from the previous day's closing price of $9.10.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased the stock listed above during the Class Period, you have certain rights. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.
If you were a purchaser of this stock between August 1, 2002 and January 23, 2003 and want to discuss your legal rights, you may e-mail or call the law office of Brodsky & Smith, LLC who will, without obligation or cost to you, attempt to answer your questions. You may contact Marc L. Ackerman, Esquire or Evan J. Smith, Esquire at Brodsky & Smith, LLC, Two Bala Plaza, Suite 602, Bala Cynwyd, PA 19004, by e-mail at clients@brodsky-smith.com, or by calling toll free 877-LEGAL-90.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca