Last update: 3:59 p.m. EDT March 10, 2009
SAN DIEGO, Mar 10, 2009 (BUSINESS WIRE) -- Coughlin Stoia Geller Rudman & Robbins LLP ("Coughlin Stoia") ( http://www.csgrr.com/cases/sprintnextel/ [1]) today announced that a class action has been commenced in the United States District Court for the District of Kansas on behalf of purchasers of Sprint Nextel Corporation ("Sprint") common stock during the period between October 26, 2006 and February 27, 2008 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Darren Robbins of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via e-mail at djr@csgrr.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.csgrr.com/cases/sprintnextel/ [1]. Any member of the putative 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. The complaint charges Sprint and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Sprint is a global communication company offering a range of wireless and wireline communications products and services for individual consumers, businesses and government customers.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and financial results. As a result of defendants' false statements, Sprint stock traded at artificially inflated prices during the Class Period.
In December 2004, Sprint Corporation and Nextel Communications ("Nextel") announced that they would merge. The merger was completed on August 12, 2005, with Sprint Corporation buying Nextel for $37.8 billion. The merger, the complaint alleges, turned out to be a disaster, as the Company has had difficulties in combining the resources of the two companies due to culture clashes and technological issues. However, during the Class Period, defendants repeatedly assured the market that the Company was poised for a turnaround and was focused on improving its core operations. As late as the summer of 2007, defendants continued to play down and conceal Sprint's problems with its network and with its customer service issues and subscriber base. Beginning in early Fall 2007, Sprint finally began to acknowledge that its initiatives were not working and that the Company was experiencing a serious deterioration in its subscriber base, due both to a slow down in new growth and a massive defection of its current subscribers to its competitors.
On February 28, 2008, before the market opened, the Company reported disappointing fourth quarter and full year 2007 financial results, including a net loss for the quarter of $29.5 billion or $10.36 diluted loss per share. On this news, Sprint's stock collapsed $0.86 per share to close at $8.09 per share.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company's CDMA business was not as healthy as represented; (b) the Company would be unable to complete its migration of its entire customer base to a uniform billing platform by 2007 from the multiple legacy platforms, thus continuing to cause customer service problems and having a negative effect on the Company's voluntary churn rate; (c) the Company had not taken the proper steps to address its customer service issues; (d) the Company failed to disclose known trends and uncertainties as required by SEC regulations concerning the loosening of its credit standards for its CDMA network and its failure to take the proper steps to address customer service issues, which would have a negative effect on the Company's operations in the future; (e) the Company was not adequately reserving for its impaired goodwill associated with Nextel or its allowance for bad debts related to subprime subscribers in violation of GAAP, causing its financial results to be materially misstated; (f) the Company had far greater exposure to liquidity concerns and ratings downgrades than it had previously disclosed; (g) the Company was failing to integrate the CDMA network and the iDEN network; and (h) given the increased volatility in the subprime market, the intense competition in the wireless industry and the problems facing Sprint due to its failure to integrate legacy Sprint and legacy Nextel operations, the Company's projections issued during the Class Period about its earnings for 2007 and 2008 were at a minimum reckless. As a result of defendants' false statements, Sprint's stock traded at inflated levels during the Class Period. However, after the above revelations seeped into the market, the Company's shares fell more than 65% from their Class Period high.
Plaintiff seeks to recover damages on behalf of all purchasers of Sprint common stock during the Class Period (the "Class"). The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Coughlin Stoia Web site ( http://www.csgrr.com [2]) has more information about the firm. SOURCE: Coughlin Stoia Geller Rudman & Robbins LLP
Coughlin Stoia Geller Rudman & Robbins LLP
Darren Robbins, 800-449-4900 or 619-231-1058
djr@csgrr.com
Links:
[1] http://www.csgrr.com/cases/sprintnextel/
[2] http://www.csgrr.com/