NEW ORLEANS, Nov. 22, 2007 (PRIME NEWSWIRE) -- Kahn Gauthier Swick, LLC ("KGS") has filed the first class action lawsuit against Virgin Mobile USA, Inc. ("VM USA" or the "Company") (NYSE:VM) in the United States District Court for the District of New Jersey, on behalf of shareholders who purchased the common stock of VM USA in connection with the Company's IPO on or about October 11, 2007, or who purchased shares thereafter in the open market. No class has yet been certified in this action.
UNLESS A CLASS IS CERTIFIED, YOU ARE NOT PERSONALLY REPRESENTED BY COUNSEL UNLESS YOU RETAIN AN ATTORNEY.
If you purchased shares of VM USA 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.
VM USA, certain of its officers and directors, certain controlling majority shareholders, and the Company's underwriters are charged with including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO, in violation of the Securities Act of 1933.
The Complaint charges that VM USA raised over $412.5 million through the issuance of 27.5 million shares, despite the Registration Statement's false and misleading statements. Specifically, defendants each failed to conduct an adequate due diligence investigation into the Company prior to the IPO, and they also each failed to reveal, at the time of the IPO, that Virgin Mobile was also not performing according to plan and that results for the third quarter of 2007 -- the period ended a full 2 weeks prior to the VM USA IPO -- showed growing losses as expenses rose and business slowed, indicating that the Company would be forced to revise downward its near-term forward financial and operational guidance.
On November 16, 2007, approximately one month after the IPO, investors learned the truth about VM USA's financial and operational condition, after defendants revealed that the Company had suffered a widening loss for the third quarter, the period ended September 30, 2007, as a result of rising expenses -- a loss of $7.3 million, or ($0.15) per share, compared with a loss of only $5.1 million, or ($0.10) per share, in the same period the prior year. These results also contrasted the $28.9 million in net income, and profits of $0.55 per share reported in the first six months of 2007, reported prior to the IPO. Further, Defendants also revealed that fourth-quarter 2007 outlook called for between 350,000 and 400,000 net customer additions, an anemic amount analysts described as "weak," and that 4Q:07 guidance would be what was described as "well below" expectations.
On this news, shares of VM USA fell nearly 30% in intra-day trading, from an opening trading price of $11.09 per share to a trading low of $8.07 per share before closing the trading day at $9.10 per share, on exceedingly high volume of 6.512 million shares.
If you wish to serve as lead plaintiff in this class action lawsuit, you must move the Court no later than January 22, 2008. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you would like to discuss your legal rights, you may e-mail or call KGS Managing Partner Lewis Kahn, without obligation or cost to you, toll free 1-866-467-1400, ext. 100, or by email at lewis.kahn@kgscounsel.com. To learn more about KGS, you may visit http://www.kgscounsel.com. KGS focuses its practice on securities class action litigation, and has been appointed lead counsel in numerous federal securities class actions.
SPECIAL NOTICE: While federal law does not prohibit other lawyers from "announcing" this class action through the issuance of other press releases, KGS is the law firm that researched, investigated, drafted, and filed the securities class action case against VM USA. If you are a VM USA shareholder who decides to contact one of these lawyers, KGS reminds you to fully interview any such lawyer to assure that he or she thoroughly understands the facts surrounding the substantive claims KGS has filed in Court. It is critically important that interested parties carefully evaluate any other firm that may be competing with KGS to prosecute the VM USA class action. Critical components of a law firm's ability to successfully prosecute this action and obtain a strong recovery for you include its knowledge of applicable federal securities laws, the resources it will dedicate to prosecution of the case (including the number of lawyers the firm has available for the Virgin Mobile USA class action), AND especially the quality of the firm's work.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca/