Barroway Topaz Kessler Meltzer & Check, LLP announced that a class action lawsuit was filed against Coinstar, Inc. by Todd E. Wright in the United States District Court for the Western District of Washington (February 24, 2011, docket number 2:2011cv00325).
For more information visit: www.btkmc.com
Unedited press release follows:
Shareholder Class Action Filed Against Coinstar, Inc. by the Law Firm of Barroway Topaz Kessler Meltzer & Check, LLP
RADNOR, Pa., Feb. 24, 2011 — The following statement was issued today by the law firm of Barroway Topaz Kessler Meltzer & Check, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Western District of Washington on behalf of purchasers of the securities of Coinstar, Inc. (Nasdaq: CSTR) (“Coinstar” or the “Company”), who purchased or otherwise acquired Coinstar securities between October 28, 2010 and February 3, 2011, inclusive (the “Class Period”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Barroway Topaz Kessler Meltzer & Check, LLP (Darren J. Check, Esq. or David M. Promisloff, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@btkmc.com.
The Complaint charges Coinstar and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Coinstar owns and operates vending machines that deliver retail products and services to consumers via self-service, interactive kiosks. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company’s revenues were significantly, adversely impacted by the agreement it had with several movie studios to delay new release availability in its kiosks by 28 days; (2) that the Company was not able to properly and effectively manage its inventory; (3) that the Company was not operating according to plan; (4) that the Company lacked adequate internal controls; (5) that, as a result of the foregoing, the Company’s financial statements were materially false and misleading at all relevant times; and (6) that defendants lacked any reasonable basis for their positive statements about the Company and its prospects.
Prior to and throughout the Class Period, defendants represented that they were prepared and able to maintain operational and revenue growth, due substantially to their efforts to provide Redbox customers with stronger DVD titles, as well as to the increased availability of those titles. In reality, the Company was experiencing significant difficulty with managing its inventory effectively and providing its customers with desirable content. Prior to the Class Period, some movie studios had imposed a 28-day waiting period upon the Company for new release titles. Although defendants were aware of the significant impact this waiting period would have on its revenues during the holiday season, on October 28, 2010, defendants stated that the Company’s fourth quarter 2010 revenue guidance would be between $415 million and $440 million, and its earnings per share (“EPS”) guidance would be between $0.79 and $0.85. On this positive news, shares of the Company’s stock increased $11.32 per share, or 24.47 percent, to close on October 29, 2010 at $57.58 per share, on unusually heavy trading volume. As a result of defendants’ material misrepresentations and omissions, the Company’s stock remained artificially high throughout the Class Period, trading between $54.62 and $66.56 per share.
On January 13, 2011, however, the Company issued a corrective disclosure regarding its previously stated guidance, lowering its fourth quarter 2010 revenue expectations from between $415 million and $440 million to $391 million, and its EPS from between $0.79 and $0.85 to between $0.65 and $0.69. Additionally, the Company revised its full-year 2011 outlook from between $1.80 and $1.95 billion to between $1.70 and $1.85 billion. Following this shocking disclosure, trading of the Company’s stock was halted. The next day, shares of the Company’s stock resumed trading and fell $15.45 per share, or 27.13 percent, to close on January 14, 2011 at $41.50 per share, on unusually heavy trading volume. Then, on February 3, 2011, the Company issued a press release announcing its actual fourth quarter and full year 2010 results, confirming the same to be well below analysts’ expectations and defendants’ previously announced guidance. Upon the release of this news, shares of the Company’s stock fell an additional $5.28 per share, or 11.93 percent, to close on February 4, 2011 at $38.96 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Barroway Topaz Kessler Meltzer & Check which prosecutes class actions in both state and federal courts throughout the country. Barroway Topaz Kessler Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.
For more information about Barroway Topaz Kessler Meltzer & Check, or for additional information about participating in this action, please visit www.btkmc.com.
If you are a member of the class described above, you may, not later than March 25, 2011 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. 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.