Three file over misleading sales figures
Three more law firms filed lawsuits against DreamWorks Animation Monday, all alleging that the company issued false and misleading statements about sales of the “Shrek 2” DVD, which in turn fraudulently propped up the price of DreamWorks stock.
All suits were filed in Los Angeles federal district court and seek to be certified as class actions.
The content of the new suits mirrors the first one filed last Thursday by law firm Abbey Gardy, which makes several assertions, primarily that in a mid-March conference call with analysts, a DreamWorks exec reported that the company expected to sell 40 million units of “Shrek 2” by the end of the month. In the same call, DreamWorks reported that sales of “Shrek 2” through the fourth quarter had been 33.7 million units, meaning the company expected to sell about 6.3 million units in the first quarter.
However, in reporting earnings on May 10, DreamWorks announced that “Shrek 2” sales in the first quarter had only been 1.3 million. As a result, the company’s stock dropped 12% the next day and fell more afterward.
The company’s filing on Monday were Schiffrin & Barroway, Schatz& Nobel, and Glancy Binkow & Goldberg. Charles J. Piven filed a similar suit on Friday.