HARTFORD, Conn., June 30, 2006 (PRIMEZONE) -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the District of Columbia on behalf of all persons who purchased or otherwise acquired the publicly traded securities of XM Satellite Radio Holdings, Inc. ("XM" or the "Company") (Nasdaq:XMSR) between the expanded period July 28, 2005 and May 24, 2006, inclusive, (the "Class Period").
The Complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements. Specifically, defendants made misrepresentations regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 9 million subscribers by year-end 2006. In anticipation of XM's competitor Sirius' contract with shock jock Howard Stern, XM began to spend extraordinarily large sums on its marketing efforts. Nevertheless, defendants represented that XM expected to exceed 9 million subscribers by year-end 2006 and that XM had been successful in lowering its subscriber acquisition costs. Throughout the Class Period, defendants failed to disclose that XM's subscriber acquisition costs would rise to extraordinary levels and that it would not meet its subscriber guidance. During the Class Period, several key insiders of XM made huge sales of their personal holdings.
On February 16, 2006, the Company announced a much wider loss in the fourth quarter on higher costs for marketing and acquiring subscribers. XM announced that its subscriber acquisition cost per customer was $89, compared to $64 in the same period of the prior year. Then, on May 24, 2006, XM announced that it was reducing its subscriber guidance for 2006 from 9 million to 8.5 million. Upon this announcement, shares of XM fell $1.76, or 13%, to close at $13.75 per share.
If you are a member of the class, you may, no later than July 3, 2006, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
To view a copy of the Complaint or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at sn06106@aol.com, or visit our website: www.snlaw.net.