Milberg Weiss Announces The Filing Of A Class Action Suit Against ATI Technologies Inc. and Certain Of Its Officers and Director
08 Septiembre 2005 - 5:22PM
Business Wire
The law firm of Milberg Weiss Bershad & Schulman LLP announces
that a class action lawsuit was filed today, on behalf of all
persons who purchased or otherwise acquired the securities of ATI
Technologies Inc. ("ATI" or the "Company") (NasdaqNM: ATYT),
between October 7, 2004 and June 22, 2005, inclusive (the "Class
Period"), seeking to pursue remedies under the Securities Exchange
Act of 1934 (the "Exchange Act"). A copy of the complaint filed in
this action is available from the Court, or can be viewed on
Milberg Weiss's website at: http://www.milbergweiss.com If you
purchased or otherwise acquired the securities of ATI between
October 7, 2004 and June 22, 2005, inclusive, and sustained
damages, you may, no later than October 17, 2005, request that the
Court appoint you as lead plaintiff. 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. Under certain circumstances,
one or more class members may together serve as "lead plaintiff."
Your ability to share in any recovery is not, however, affected by
the decision whether or not to serve as a lead plaintiff. You may
retain Milberg Weiss Bershad & Schulman LLP, or other counsel
of your choice, to serve as your counsel in this action. The
action, case no. 05-CV-4816, is pending before the Honorable Thomas
N. O'Neill, Jr. in the United States District Court for the Eastern
District of Pennsylvania against defendants ATI, Kwok Yuen Ho
(Chairman), David E. Orton (President and CEO), and Patrick G.
Crowley (CFO). According to the complaint, defendants violated
sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by
issuing a series of material misrepresentations to the market
during the Class Period. The complaint alleges that ATI designs and
manufactures graphics processing products and technology for
desktop and notebook personal computers ("PCs"), and for consumer
electronic devices. Throughout the Class Period, ATI reported
strong financial results in publicly disseminated press releases
and in filings with the SEC. In addition, defendants repeatedly
issued positive guidance, claiming that ATI's purported leadership
in graphics and multimedia technologies in the consumer electronics
and PC markets would "continue driving growth for ATI in fiscal
2005." As a result of these statements, the price of ATI stock
became artificially inflated during the Class Period. Certain
Company insiders, including defendants Kwok Yuen Ho and David E.
Orton took advantage of the artificial inflation in the price of
the Company's stock, and during the Class Period, each sold
approximately 40% of their personally-held ATI stock for total
proceeds of over $54 million. Ho and his wife had allegedly engaged
in a similar pattern of insider trading in 2000, and reaped $7
million in proceeds therefrom. The truth began to emerge on June 6,
2005. On that day, ATI warned that its revenues for the third
quarter 2005 would be $530 million, 5% below the Company's
guidance. The Company stated that a shift in its product mix
towards the lower end of the desktop and notebook market
contributed to a decline in gross margin for the quarter. In
addition, ATI claimed that the production of integrated graphics
processor products, which had margins well below the corporate
average, contributed to lower profit margins, and stated that it
was experiencing lower than anticipated yields on certain products
due to operational issues. As a result, the Company lowered its
guidance for its third and fourth quarter of 2005. In reaction to
this news, the price of ATI stock fell $1.58, or 10.3%, from its
previous trading day's closing price of $15.26 per share, to close
at $13.68 on June 7, 2005. On June 23, 2005, the Company revealed
in a press release that it had experienced a net loss of $400,000
in the third quarter 2005, compared to a $49 million profit in the
same period in 2004. In addition, defendants slashed their guidance
for the fourth quarter, projecting revenues to be approximately
$550-580 million, 10% lower than previously projected, and that
gross margins to be 29-30%, approximately 5% lower than defendants'
previous guidance of 34%. In reaction to this news, the price of
ATI stock declined even further, falling $0.98, or 7.6%, to close
at $11.80 on June 23, 2005. On the same day, Smartmoney.com
published an article stating that ATI's disappointing results and
lower guidance was due, in part, to the Company's "difficulty in
rolling out its new graphics processor, while supercharged
competitor Nvidia (NVDA) is already in full production with its new
high-end GeForce 7800 GTX processor. And as the topper, ATI's
sitting on a fat pile of inventory, some $456 million worth -- much
more than the $255 million it had at the end of fiscal 2004."
Milberg Weiss Bershad & Schulman LLP
(http://www.milbergweiss.com) is a firm with over 100 lawyers with
offices in New York City, Los Angeles, Boca Raton, Delaware, and
Washington D.C. and is active in major litigations pending in
federal and state courts throughout the United States. Milberg
Weiss has taken a leading role in many important actions on behalf
of defrauded investors, consumers, and others for nearly 40 years.
Please contact the Milberg Weiss website for more information about
the firm. If you wish to discuss this action with us, or have any
questions concerning this notice or your rights and interests with
regard to the case, please contact the following attorneys: -0- *T
Steven G. Schulman Peter E. Seidman Andrei V. Rado One Pennsylvania
Plaza, 49th fl. New York, NY 10119-0165 Phone number: (800)
320-5081 Email: sfeerick@milbergweiss.com Website:
http://www.milbergweiss.com *T
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