According to the law firm press release, Leapfrog Enterprises, Inc. ("LeapFrog" or the Company) is a developer of educational entertainment for children. The Company’s product portfolio consists of multimedia learning platforms and related content, and learning toys. The Company has developed a number of learning platforms, including the LeapPad family of learning tablets, the Leapster family of handheld learning game systems, and the LeapReader reading and writing systems.
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose to investors that: (1) the Company was experiencing a decline in consumer demand; (2) the launch and shipment of the Company’s new LeapTV video game system were delayed by developmental issues; (3) retailers were overstocked with the Company’s LeapPad products; (4) as a result, the Company lacked a reasonable basis for its financial guidance; and (5), as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times.
On January 22, 2015, after the close of trading, LeapFrog announced preliminary financial results for its 2014 fiscal third quarter. These financial results were significantly below the Company’s stated expectations and financial guidance. According to the Company, LeapFrog’s disappointing sales results were related to decreased demand for its products and development issues with the Company’s LeapTV educational video game system. Following this news, shares of LeapFrog declined nearly 35%, to close on January 23, 2015, at $2.55 per share, on unusually heavy volume.
On August 2, 2016, the Court issued an Order granting Defendants' motion to dismiss. Plaintiffs were given leave to replead. Lead Plaintiff filed an amended Complaint on September 20.
The parties entered into a Stipulation of Settlement on February 22, 2018. On March 20, 2018, the Court preliminarily approved the Settlement. On October 26, the Court granted final approval of the Settlement and entered Final Judgment.
