According to the press release dated December 15, 2009, the complaint alleges that during the Class Period defendants issued a series of false and misleading statements and/or concealed material adverse facts regarding the Company’s business and prospects. Specifically, the complaint alleges that defendants’ statements misrepresented and failed to disclose the following adverse facts: (a) the Company was losing customers at a higher rate than previously experienced and was failing to add new customers due to increased competition; (b) the Company’s average revenue per user was lower than expected due to an increase in promotional activity; (c) the Company’s increase in subscribers in the first quarter was due to a promotion whereby customers received the first month free and could cancel without penalty; (d) the reported new subscriber numbers were artificially inflated by the inclusion of upgraded subscribers as new additions; (e) the costs of acquiring new customers was increasing due to an intensification of the Company’s marketing campaigns in the Northeast market along with its promotional activities; and (f) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
Then, on November 5, 2009, before the market opened, MetroPCS issued a press release announcing its third quarter 2009 financial results, reporting that the Company’s net additions were below expectations due to elevated churn and a deceleration in gross additions, and lowering its guidance for the year. In response to the lowered guidance, the price of MetroPCS stock fell $0.61 per share, or 9%, to close at $6.01 per share.
On May 11, 2010, Senior Judge A. Joe Fish signed the order appointing Kevin Hopson as lead plaintiff and approving lead plaintiff’s choice of Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel and the Kendall Law Group, LLP as liaison counsel for the class. On June 25, 2010, the lead plaintiff filed a First Amended Class Action Complaint against the defendants. On August 9, 2010, the defendants filed a motion to dismiss the First Amended Complaint. The motion was denied on March 25, 2011.