CASES
SearchMedia Holdings Limited (F/K/A Ideation Acquisition)
Class Period: Apr 1, 2009 to Aug 20, 2010
Lead Plaintiff Deadline: Nov 15, 2010 + Deadline passed
Summary of Case:
A securities class action has been filed against SearchMedia Holdings Limited (F/K/A Ideation Acquisition Corp.) (IDI) ("SearchMedia" or the "Company") on behalf of all securities purchasers from April 1, 2009 through August 20, 2010, inclusive ("Class Period"), in the United States District Court for the Central District of California.
The compalint alleges that throughout the Class Period, defendants knew or recklessly disregarded that their public statements concerning SearchMedia Holdings Limited, formerly Ideation Acquisition Corp. and SearchMedia International Limited's ("SMIL") business, operations and prospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that SMIL was improperly recognizing revenue; (2) that certain of SMIL's accounts receivable related to sales generated primarily in the in-elevator business were uncollectible, (3) that, as a result, SMIL's financial results were overstated; (4) that SMIL's financial results were not prepared in accordance with Generally Accepted Accounting Principles; (5) that SMIL lacked adequate internal and financial controls; and (6) as a result of the above, SMIL's financial statements were materially false and misleading at all relevant times.
On August 20, 2010, SearchMedia announced that the historical financial statements of SMIL for the 2007 and 2008 fiscal years would have to be restated and that the financial statements from these periods can no longer be relied upon. SearchMedia informed investors that it estimated that SMIL's revenue in 2007 and 2008 had been overstated by approximately $6 million and $25 million, respectively.
On this news, SearchMedia's stock fell $0.78 per share, or nearly 23%, to close on August 20, 2010, at $2.62 per share on unusually heavy trading volume, and further declined an additional $0.92 per share, more than 35%, to close on August 23, 2010, at $1.70 per share, again on unusually heavy trading volume. Over the course of these two days of trading, SearchMedia's stock declined a combined $1.70 per share, or 50%, from the closing price of $3.40 per share on August 19, 2010.
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.