According to the law firm press release, THQ develops, publishes, and distributes interactive entertainment software for various game systems, personal computers, wireless devices, and the Internet, including the uDraw™ GameTablet™ (“uDraw’).
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants’ statements were each materially false and misleading when made because they misrepresented and failed to disclose the following adverse facts, which were known to defendants or recklessly disregarded by them: (a) that demand for the Company’s uDraw was well below internal expectations and the Company would have to take back, or provide price protection, on hundreds of thousands of uDraw units that it had sold; (b) that the uDraw for the Microsoft Xbox 360 and Sony PlayStation 3 was a failure and not being purchased by owners of those gaming systems; and (c) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
On December 7, 2011, THQ issued a press release updating its outlook for the 2012 fiscal third quarter, ended December 31, 2011. For the quarter, the Company expected to report net sales of approximately 25% below its previously announced guidance of $510 million to $550 million, due to “weaker-than-expected initial sales of its uDraw GameTablet for Xbox 360 and PlayStation 3.” Then, on February 2, 2012, THQ issued a press release announcing its financial results for the fiscal third quarter of 2012. For the quarter, the Company reported net sales of $404.4 million, and a net loss of $55.9 million, or $0.82 per diluted share. In reaction to this news, on February 3, 2012, the price of THQ stock fell $0.23 per share, or 30%, to close at $0.53 per share, on extremely heavy trading volume.
On September 14, 2012, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel. On November 13, 2012, the plaintiff filed their First Amended Complaint.
On January 14, 2013, the Court ordered that this action be removed from its active caseload until further application by the parties or Order of the Court.
On February 4, 2015, the Court issued an Order granting Defendants' motion to dismiss.
On March 3, 2015, the Lead Plaintiffs filed a Notice of Appeal of the above decision. On January 12, 2017, the Court of Appeals issued a Memorandum reversing the decision of the District Court and remanding for further proceedings.
On May 5, 2017, the parties filed a Stipulation of Settlement.