NEW YORK, July 8, 2005 (PRIMEZONE) -- In a release issued earlier today under the same headline, please note the law firm of Goodkind Labaton Rudoff & Sucharow LLP incorrectly stated that Samuel J. Palmisano and Timothy S. Shaughnessy are defendants in the case. The complete corrected release follows:
Goodkind Labaton Rudoff & Sucharow LLP filed a class action lawsuit on July 8, 2005 in the United States District Court for the Southern District of New York, on behalf of persons who purchased or otherwise acquired publicly traded securities of International Business Machines Corporation ("IBM" or the "Company") (NYSE:IBM) between April 5, 2005 and April 15, 2005, inclusive, (the "Class Period"). The lawsuit was filed against IBM and Mark Loughridge ("Defendants").
If you bought IBM securities between April 5, 2005 and April 15, 2005, inclusive, you may qualify to serve as Lead Plaintiff. Lead Plaintiff papers must be filed with the court no later than sixty days from today. If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, please contact one of our representatives or Christopher Keller, Esq. at 800-321-0476. If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.glrslaw.com/get/?case=IBM
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. Specifically, the complaint alleges that Defendants failed to disclose, despite having a duty to do so, that:
-- At the time of its analyst conference call on April 5, 2005,
which was purportedly to discuss the impact of expensing options
under SFAS 123R, the Company was experiencing significant
operational issues in multiple areas of its business. In
particular, the Company had been unable to close significant
transactions late in the first quarter, it was experiencing
elongated sales cycles, and was having product-transition problems
in its hardware segment.
-- The Company intentionally accelerated the adoption of SFAS 123R,
despite having an additional two quarters to implement it, in
order to sufficiently lower analyst expectations so that when it
later disclosed the operational issues and reported earnings from
continuing operations of $0.85 per share for the first quarter
2005, it would have the effect of cushioning the blow of the
significant earnings miss.
-- The Company intentionally misrepresented the impact from expensing
options, indicating an earnings impact of $0.14 per share on April
5, 2005 (versus the actual impact of $0.10 per share reported on
April 14, 2005), in order to disguise a significant and material
operating miss.
On April 14, 2005, IBM reported first quarter 2005 financial results. The Company posted net income of $1.4 billion, or $0.84 per share, which represented an additional miss of $0.06 per share, undisclosed nine days earlier. The Company also revealed that the miss was significantly attributable to operations, rather than wholly attributable to SFAS 123R, as the Company had previously indicated. Shares reacted negatively to the news, falling from $83.64 per share on April 14, 2005, to $76.70 per share on April 15, 2005. Before the markets opened on evening, April 18, 2005, the Wall Street Journal published an article characterizing IBM's April 5, 2005 announcement as "clouding" IBM's true financial position, and "cushioning the blow" of its earnings miss. On May 4, 2005, IBM announced that it would be reducing its workforce by 10,000 to 13,000 employees. On June 27, 2005, the Company announced that the SEC had begun an informal investigation into the Company's statements regarding the earnings miss.
Investors who purchased IBM securities between April 5, 2005 and April 15, 2005, inclusive, may be entitled to recover their losses under the federal securities laws.
Plaintiffs are represented by the law firm of Goodkind Labaton Rudoff & Sucharow LLP. Goodkind Labaton is one of the country's premier national law firms that represent individual and institutional investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca