CASES
MetroPCS Communications Inc.
Class Period: Feb 26, 2009 to Nov 4, 2009
Lead Plaintiff Deadline: Feb 15, 2010 + Deadline passed
Summary of Case:
A securities class action has been filed against MetroPCS Communications (PCS) ("MetroPCS" or the "Company") on behalf of all securities purchasers from February 26, 2009 through November 4, 2009, inclusive ("Class period"), in the United States District Court for the Northern District of Texas.
The complaint alleges that during the Class Period defendants issued a series of false and misleading statements and/or concealed material adverse facts regarding the MetroPCS's business and prospects. Specifically, the defendants' statements misrepresented and failed to disclose the following adverse facts: (a) the Company was losing customers at a higher rate than previously experienced and was failing to add new customers due to increased competition; (b) the Company's average revenue per user was lower than expected due to an increase in promotional activity; (c) the Company's increase in subscribers in the first quarter was due to a promotion whereby customers received the first month free and could cancel without penalty; (d) the reported new subscriber numbers were artificially inflated by the inclusion of upgraded subscribers as new additions; (e) the costs of acquiring new customers was increasing due to an intensification of the Company's marketing campaigns in the Northeast market along with its promotional activities; and (f) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
Then, on November 5, 2009, before the market opened, MetroPCS issued a press release announcing its third quarter 2009 financial results, reporting that the Company's net additions were below expectations due to elevated churn and a deceleration in gross additions, and lowering its guidance for the year. In response to the lowered guidance, the price of MetroPCS stock fell $0.61 per share, or 9%, to close at $6.01 per share.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.