Defendants filed their motion to dismiss the case on June 18, 2008. The judge granted their motions and simultaneously denied plaintiffs' motion to amend the complaint. The case has been dismissed with prejudice.
On March 3, 2008, a motion to appoint Southern Ohio Iron Workers as lead plaintiff and to approve the selection of lead and liaison counsel was filed. Just as quickly, a motion to dismiss was filed by Comcast on March 10, 2008. The judge entered his order consolidating all related cases, appointing Southern Ohio Iron Workers as lead plaintiff and approving law firm of Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. The plaintiffs did not delay in filing an Amended Complaint with the court on May 19, 2008.
The original complaint charges Comcast and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Comcast, together with its subsidiaries, operates as a cable operator in the United States.
The complaint alleges that, during the Class Period, defendants materially misled the investing public, thereby inflating the price of Comcast’s common stock by publicly issuing false and misleading statements and failing to disclose: (i) that the Company was experiencing increased competition from satellite providers and telephone companies which was forcing it to spend more to attract and retain customers, and that this adverse trend was worsening; (ii) that the Company’s level of capital expenditures necessary to upgrade and maintain its technology and equipment was rising beyond internal expectations; and (iii) as a result of the foregoing, defendants’ positive statements about the Company and their earnings guidance were lacking in a reasonable basis at all times.
On October 25, 2007, Comcast issued a press release announcing its financial results for the third quarter of 2007, the period ended September 30, 2007. The Company reported that third-quarter net income fell 54% from the prior year and that it was experiencing slowing subscriber growth. Upon these announcements, the price of Comcast common stock fell $2.57 per share, or approximately 11%, to close at $21.28 per share, on heavy trading volume.
Then, on December 4, 2007, after the markets closed, the Company issued a press release announcing that it was cutting its 2007 user growth forecast of 6.5 million revenue generating units ("RGUs") to 6 million RGUs and that its revenue and cash flow growth projections would fall short of expectations. Upon this news, the price of Comcast common stock fell an additional $2.55 per share, or approximately 12%, to close at $18.18 per share, on heavy trading volume.