NEW YORK, Dec. 10, 2003 (PRIMEZONE) -- The Law Firm of Wechsler Harwood LLP announced today that a class action lawsuit has been filed on behalf of purchasers of Portal Software, Inc. ("Portal Software" or the "Company") (Nasdaq:PRSF) common stock between May 20, 2003 and November 13, 2003, both dates inclusive (the "Class Period").
The action, entitled Caligure v. Portal Software Inc., et al., C:03-CV-5536 (JW), is pending in the United States District Court for the Northern District of California against Portal Software, John E. Little, Howard A. Bain, III, David Labuda, Marc Aronson and Arthur C. Patterson. A copy of the complaint is available from the Court or can be viewed on the firm's website at www.whesq.com.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between May 20, 2003 and November 13, 2003, thereby artificially inflating the price of Portal Software common stock. The Complaint alleges that defendants issued numerous public statements concerning Portal Software's revenue growth, product and marketing initiatives, and increasing revenues and profits while failing to disclose that demand for the Company's products was materially declining. Prior to the disclosure of this adverse information to the market, the Company completed a public offering of Portal Software common stock raising over $56 million in net proceeds and the Individual Defendants, as well as other high-level executives of Portal Software, sold their personally-held Portal Software common stock to the unsuspecting public reaping proceeds of more than $4.8 million.
As alleged in the Complaint, the Class Period commences on May 20, 2003, the date on which the Company issued a press release announcing its first quarter financial results, for the period ending May 2, 2003 (the "May 2nd Press Release"). In addition to announcing the Company's financial results, as alleged in the Complaint, defendants represented in the May 2nd Press release, among other things that: (a) "We are the only company in our market reporting increasing revenues and quarter-to-quarter product license growth."; and (b) that the Company would "return to pro forma profitability (excluding certain acquisition costs) and positive cash flow operations within the current fiscal year." Then, as alleged in the Complaint, in the June 2003 issue of Worldwide Telecom, Portal Software announced that Eircom, an Ireland-based provider of fixed telecommunications, had successfully implemented Portal Software's convergent billing platform, Infranet. On August 19, 2003, as alleged in the Complaint, Portal Software issued a press release announcing its financial results for the second quarter of 2003, the period ending August 1, 2003 (the "August 19th Press Release"). The Company reported revenues of $33.2 million for the second quarter. On September 12, 2003, Portal Software announced that it had priced a public offering of more than 22 million shares of its common stock, raising more than $56 million for the Company. In connection with the offering, Portal Software filed a registration statement with the SEC which included, among other things, positive representations concerning the Company's business and its core product, Infranet.
The Complaint alleges that the statements referenced above, in addition to others alleged in the Complaint, 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 the Company's sales and marketing efforts were not performing well and the Company was experiencing declining demand for its products and services; (b) that the Company was experiencing an adverse and material lengthening of product sales cycles and a material increase in deferred revenues; (c) that due to continuing and severe problems with the Company's core products, the Company was unable to service its existing customers, causing additional erosion of the Company's revenue streams; and (d) as a result of the foregoing, defendants' lacked a reasonable basis for their earnings projections at all times.
The Class Period ends on November 13, 2003. On that date, Portal Software issued a press release announcing that it expected net losses of $0.36-0.40 per share for the third quarter fiscal 2004 versus prior earnings guidance of net profits of $0.04 per share. Defendants cited contract delays and revenue recognition deferrals. Market reaction to defendants' belated disclosures was swift and severe. In after-hours trading on November 13, 2003, the price of Portal Software common shares fell more than 42.5% to open at $8.77 per share on November 14, 2003, and have decreased more than 51% from a Class Period high of $17.93 per share reached less than a month before on October 15, 2003.
If you purchased or otherwise acquired publicly traded securities of Portal Software during the Class Period, you may, no later than January 20, 2004, move to be appointed as a lead plaintiff in this class action. 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 the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood or other counsel of your choice to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders and has recovered hundreds of millions of dollars in those efforts. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400
Craig Lowther, Wechsler Harwood Shareholder Relations Department: clowther@whesq.com (Ext. 257)
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca