NEW ORLEANS, Oct. 24, 2007 (PRIME NEWSWIRE) -- Kahn Gauthier Swick, LLC ("KGS") announces that shareholders of Heelys, Inc. ("Heelys" or the "Company") (Nasdaq:HLYS) who purchased shares of the Company in connection with its December, 2006 Initial Public Offering ("IPO") or who purchased shares thereafter in the open market, have only 48 hours, or until October 26, 2007 to move for appointment as Lead Plaintiff in a securities class action lawsuit currently pending in the United States District Court for the Northern District of Texas.
If you purchased shares of Heelys in connection with the IPO or if you purchased shares thereafter in the open market, you are urged to contact Lewis Kahn, Managing Partner, KGS, toll free 1-866-467-1400, ext. 100, via cell phone at 504-301-7900, or by email at lewis.kahn@kgscounsel.com to learn about your legal rights and how this action may benefit you. For further information on KGS, please visit www.kgscounsel.com. KGS focuses its practice on securities class action litigation, and has been appointed lead counsel in numerous federal securities lawsuits that seek a recovery for shareholders.
Heelys and certain officers, directors and underwriters are charged with including false and misleading statements in the registration statement and proxy-prospectus issued in connection with the IPO in direct violation of the Securities Act of 1933. The complaint alleges that the Registration Statement used by defendants in connection with the IPO was misleading in that it represented that Heelys had a viable, well-established business plan and that its tremendous revenue growth and resulting profits were based on sound business and stable sales practices. Moreover, the Registration Statement failed to disclose the staggering number of injuries suffered by Heelys' users in the months leading up to the IPO. The Company and certain of its senior executives and directors sold $155 million worth of Heelys stock at $21 per share in the IPO.
On August 8, 2007, following the issuance of product safety warnings by the Consumer Product Safety Commission and other industry safety groups that affected the shoe's marketability, defendants were forced to significantly downgrade the Company's revenue and earnings guidance for the second half of 2007, admitting that retailers were sitting on huge unsold inventory and refusing to place additional orders. On this news, the Company's stock price fell 45% in a single trading session on more than six-times the average daily trading volume over the preceding month.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca.