According to the law firm press release, magicJack provides voice-over-Internet-protocol telephone services. The Company develops and markets computer software and hardware for making telephone calls over the Internet.
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company overstated revenue, earnings and cash flow in its SEC filings; (ii) the Company overstated its cash balance by investing its shareholder cash in highly aggressive and unconventional securities; (iii) the Company overstated its earnings by inconsistently treating its allowance for doubtful accounts and billing adjustments; (iv) the Company improperly altered the estimated life of its assets, causing a decrease in its depreciation expense; (v) while the Company claimed that it was writing down its excess inventory of chips, it instead wrote down finished products in order to hide weakening sales momentum; and (vi) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.
On January 9, 2013, Copperfield Research published a report revealing, among other things, that the Company had been consistently overstating its revenue and profitability. According to the report, “magicJack has presented its retail investor base with earnings press release and financial tables that are overstated and later altered based on the corresponding SEC filings.”
On this news, magicJack stock declined $2.01 per share or more than 11%, to close at $15.30 per share on January 9, 2013.
On March 12, 2013, the plaintiffs filed an amended complaint.
On April 26, 2013, the Court issued an Order appointing lead plaintiffs and approving the selection of lead counsel.
On July 22, the lead plaintiffs filed a Second Amended Complaint.
On January 29, 2014, the Court's issued an Opinion granting the Defendants' motion to dismiss.