PHILADELPHIA, May 3, 2006 (PRIMEZONE) -- Law Offices Bernard M. Gross, P.C. (http://www.bernardmgross.com) announces that a class action lawsuit, numbered 06-0802 was commenced in the United States District Court for the District of Columbia before the Honorable Ellen S. Huvelle, on behalf of purchasers of the common stock of XM Satellite Radio Holdings, Inc. ("XM" or the "Company") (Nasdaq:XMSR) between July 28, 2005 and February 15, 2006, inclusive (the "Class Period").
The action is pending against defendants XM Satellite Radio Holdings, Inc. and Hugh Panero, President, Chief Executive Officer of XM and a director of XM. A copy of the Complaint is available from the Court or can be viewed on the Law Offices Bernard M. Gross, P.C. website at www.bernardmgross.com or contact us by phone at 866-561-3600 (toll free) or by email at susang@bernardmgross.com.
The Complaint charges XM Satellite Radio Holdings, Inc and Hugh Panero with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 by issuing a series of materially false and misleading statements to the market during the Class Period. As alleged in the Complaint, defendants made misrepresentations and/or omissions regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality and as known to or recklessly disregarded by defendants, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005, in order to stay on track to achieve its stated goal of 6 million subscribers at year end by reason of competitive factors known to defendants since before the beginning of the Class Period. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting and touting throughout the Class Period.
During the class period, several key insiders of XM made huge sales of their personal holdings in the forth quarter of 2005, before any disclosure of the astronomical increase in XM's SAC and CPGA, taking advantage of the artificial inflation of XM's common stock. Specifically, defendant Panero sold 413,334 shares on December 6, 2005 at prices ranging between $28.37 and $28.95 to reap proceeds of $11,846,000, thus selling 99% of his holdings in XM.
On February 16, 2006 defendants issued a press release announcing XM's results for the fourth quarter 2005 and year 2005 results. They disclosed the shocking truth about the skyrocketing level of XM's subscriber acquisition costs. The market reacted negatively. With this disclosure XM's common stock, on abnormally heavy trading volume fell 13% to close at $21.96 on February 17, 2006.
If you purchased the securities of XM Satellite Radio Holdings, Inc. (Nasdaq:XMSR) during the period July 28, 2005 and February 15, 2006, you may no later than July 3, 2006, 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. If you wish to discuss this action or have any questions concerning this Notice or rights or interests with respect to these matters,
Law Offices Bernard M. Gross, P.C. has significant experience and expertise in prosecuting class actions. Recently filed securities cases include the following:
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More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.