COLCHESTER, Conn., May 10, 2006 (PRIMEZONE) -- On May 10, 2006, Scott+Scott, LLC, filed a class action lawsuit in the U.S. District Court for the District of Columbia against XM Satellite Radio Holdings, Inc. (Nasdaq:XMSR) ("XMSR" or the "Company") and its chief executive officer, Hugh Panero, on behalf of securities purchasers during the period July 28, 2005 through February 15, 2006, inclusive (the "Class Period") for securities law violations. XM Satellite Radio operates a satellite radio service company. The lawsuit alleges that defendants made false and misleading statements regarding the Company's subscriber acquisition costs by relying on accounting metrics that did not comply with Generally Accepted Accounting Principles ("GAAP") and therefore were easy to manipulate. As a result, the Company's stock price was artificially inflated, thereby harming Class Period investors.
If you purchased XMSR securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than July 3, 2006. Any purported class member may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (scottlaw@scott-scott.com, 800/404-7770, 860/537-5537) or visit the Scott+Scott website, www.scott-scott.com, for more information. There is no cost or fee to you.
According to the complaint, during the Class Period, defendants misrepresented the Company's ability to reduce its subscriber acquisition costs, which was required to validate XMSR's business model and achieve profitability. In reality, it is alleged defendants knew or consciously and recklessly disregarded that the Company would continue to make inordinately large expenditures going into the end of the 2005 fiscal year to achieve its heralded goal of 6 million subscribers, making its claims regarding scalable reductions in subscriber acquisition cost blatantly false and misleading.
On February 16, 2006, defendants announced that for the Company's fourth fiscal quarter, subscriber acquisition cost was $89 per customer compared to $64 per customer in the same period last year. On this news, the price of XMSR shares fell 12.9%, on unusually high trading volume.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.