The Pomerantz Firm Charges XM Satellite Radio Holdings Inc. With Securities Fraud -- XMSR


NEW YORK, May 23, 2006 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court for the District of Columbia, against XM Satellite Radio Holdings Inc. ("XM Satellite" or the "Company") (Nasdaq:XMSR) and Hugh Panero, President and Chief Executive Officer, on behalf of purchasers of the common stock of the Company during the period from July 28, 2005 -- February 15, 2006, inclusive (the "Class Period"). The complaint alleges violations of Section 10(b) and Section 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.

XM Satellite, a Delaware Corporation, operates as a satellite radio service company primarily in the United States. The Complaint alleges that throughout the class period, defendants issued a series of false and misleading statements, all of which misrepresented that XM Satellite was able to reduce the cost of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. The fact was that XM Satellite 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. The complaint also alleges that despite defendants' knowledge that XM Satellite would be making those huge expenditures, defendants failed to disclose to the market that the Company's cost of subscriber acquisitions would rise to extraordinary levels, leading to huge increases in net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting throughout the class period.

On February 15, 2006, the Company's stock price closed at $25.25. On February 16, 2006 defendants issued a press release announcing the previous undisclosed truth about the skyrocketing level of the Company's subscriber acquisition costs in the fourth quarter of 2005. With the disclosure, on February 17, 2006, XM Satellite's common stock fell 13%, to close at $21.96.

If you purchased the securities of XM Satellite during the Class Period, you have until July 3, 2006 to ask the Court to appoint you as lead plaintiff for the Class. Lead plaintiffs must meet certain legal requirements. Shareholders outside the United States may also join the action, regardless of where they live or which exchange was used to purchase the securities. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) or Carolyn S. Moskowitz (csmoskowitz@pomlaw.com) of the Pomerantz Firm at (888) 476-6529 (or (888) 4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.

The Pomerantz Firm, which has offices in New York, Chicago and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. For more information about the Firm, visit our web site at www.pomlaw.com.

More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca



            

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