Virgin Mobile USA faces class action lawsuit

Coughlin Stoia Geller Rudman & Robbins has filed a class action lawsuit against Virgin Mobile USA that alleges that Virgin Mobile and some of its executives violated the Securities Act of 1933 by failing to disclose in its IPO prospectus that the MVNO would report a widening loss and slower subscriber growth for Q3 2007.

In mid-October Virgin Mobile sold more than 27.5 million shares of common stock to the public for $15 per share, making for more than $412 million. According to the suit, on November 15, 2007, after the close of the market, Virgin Mobile issued a press release announcing its financial results for the third quarter of 2007, which included a loss of $7.3 million.

UPDATE: A Virgin Mobile USA representative wrote in to say that the lawsuit is without merit and that the company plans to fight the suit vigorously. 

For more on the suit:
- read the press release

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