According to a press release dated June 11, 2009, the complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. Specifically, the complaint alleges that defendants failed to disclose the following adverse facts, among others: (i) that sales cycles for the Company’s Employment Process Outsourcing (“EPO”) and assessments lines of business were lengthening, causing sales to be pushed out and revenue growth to slow; (ii) that the Company was experiencing problems with its international sales and would need to revamp that sales force; (iii) that the Company was experiencing problems with a significant EPO client such that the client was requesting to be released from its contract with the Company; and (iv) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its earnings, operations and prospects.
On November 7, 2007, Kenexa issued a press release announcing its financial results for the third quarter of 2007, the period ended September 30, 2007. Following the earnings release, defendants held a conference call to discuss the Company’s earnings and operations. In response to the earnings announcement and the statements made during the conference call, the price of Kenexa stock dropped from $27.84 per share to $16.61 per share, or 40%, on extremely heavy trading volume.
On September 11, 2009, an order that the motion for consolidation and appointment as lead plaintiff and approval of its selection of lead counsel was granted in part and denied in part; the motion was granted insofar as it relates to the appointment of lead plaintiffs and selection of lead counsel; the motion was denied as moot insofar as it relates to consolidating of cases.
On October 26, 2009, an amended complaint was filed in this action against the defendants.
On September 27, 2010, the Defendants motion to dismiss was granted and the action was dismissed in its entirety with prejudice and the Clerk of Court closed this action.