On October 12, 2000, Gateway reported its Q3 2000 financial results. These results were materially false and misleading as defendants failed to write down Gateway's impaired assets in order to inflate Gateway's financial results. Thereafter, defendants issued a series of false and misleading statements concerning the Company's business and its prospects for Q4 2000. Defendants actually knew that Gateway's business was faltering, that its Q3 results were false, and that its Q4 results would show no growth and would devastate Gateway's share price. Despite this actual knowledge, defendants claimed that Gateway would achieve EPS growth of almost 50% in Q4 and even went so far as to claim that Gateway shares were significantly "undervalued." On November 20, 2000, defendants issued a press release over a national newswire service which proclaimed that Gateway would achieve the Q4 results they had assured investors Gateway would easily achieve.
On November 29, 2000, defendants shocked the investing public as defendants' scheme started to unwind. It was then revealed that defendants' bold claims of solid Q3 results and Q4 projections were not as defendants had claimed.
Defendants then admitted that Gateway would not achieve Q4 growth of almost 50% but instead would report potential losses and absolutely no growth at all. Defendants' release also revealed that Gateway would take a $200 million charge for impairment in Q4. In reality, most of this write-down should have been taken in Q3. Defendants' failure to record the write down inflated Gateway's Q3 results.
The market reaction to this news was devastating. In minutes, Gateway lost several billion dollars of market capitalization resulting in losses to thousands of Gateway shareholders, as Gateway's stock price declined from $31 to $19 in two days, on huge volume of 23.3 million shares.
Milberg Weiss Files Class Action Suit Against Gateway, Inc.
SAN DIEGO--(BUSINESS WIRE)--Dec. 7, 2000--Milberg Weiss (http://www.milberg.com/gateway/) today announced that a class action has been commenced in the United States District Court for the Southern District of California on behalf of purchasers of Gateway, Inc. ("Gateway") (NYSE: GTW) common stock during the period between October 13, 2000 and November 29, 2000 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss at 800/449-4900 or via e-mail at You can join this class action online at milberg.com.
The complaint charges Gateway and certain of its officers and directors with violations of the Securities Exchange Act of 1934 described below.
On October 12, 2000, Gateway reported its Q3 2000 financial results. These results were materially false and misleading as defendants failed to write down Gateway's impaired assets in order to inflate Gateway's financial results. Thereafter, defendants issued a series of false and misleading statements concerning the Company's business and its prospects for Q4 2000. Defendants actually knew that Gateway's business was faltering, that its Q3 results were false, and that its Q4 results would show no growth and would devastate Gateway's share price. Despite this actual knowledge, defendants claimed that Gateway would achieve EPS growth of almost 50% in Q4 and even went so far as to claim that Gateway shares were significantly "undervalued." On November 20, 2000, defendants issued a press release over a national newswire service which proclaimed that Gateway would achieve the Q4 results they had assured investors Gateway would easily achieve.
On November 29, 2000, defendants shocked the investing public as defendants' scheme started to unwind. It was then revealed that defendants' bold claims of solid Q3 results and Q4 projections were not as defendants had claimed.
Defendants then admitted that Gateway would not achieve Q4 growth of almost 50% but instead would report potential losses and absolutely no growth at all. Defendants' release also revealed that Gateway would take a $200 million charge for impairment in Q4. In reality, most of this write-down should have been taken in Q3. Defendants' failure to record the write down inflated Gateway's Q3 results.
The market reaction to this news was devastating. In minutes, Gateway lost several billion dollars of market capitalization resulting in losses to thousands of Gateway shareholders, as Gateway's stock price declined from $31 to $19 in two days, on huge volume of 23.3 million shares.
Plaintiff seeks to recover damages on behalf of all purchasers of Gateway common stock during the Class Period (the "Class"). The plaintiff is represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Milberg Weiss has been actively engaged in commercial litigation, emphasizing securities and antitrust class actions, for more than 30 years. The firm has offices in New York, San Diego, San Francisco, Los Angeles and Boca Raton and is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to major positions in complex multi-district or consolidated litigations. Milberg Weiss has taken a lead role in numerous important actions on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total approximately $20 billion.
CONTACT:
Milberg Weiss Bershad Hynes & Lerach LLP
William Lerach, 800/449-4900
wsl@mwbhl.com
TICKERS: NYSE:GTW
KEYWORD: CALIFORNIA
BW0463 DEC 07,2000
17:41 PACIFIC
20:41 EASTERN |
