Bernstein Liebhard LLP Announces That A Securities Class Action Lawsuit Has Been Filed Against Kit Digital, Inc.
May 28, 2012
Bernstein Liebhard LLP today announced that a securities class action has been commenced in the United States District Court for the Southern District of New York on behalf of a class of purchasers of KIT digital, Inc. (“KIT digital” or the “Company”) (NASDAQ: KITD) securities between November 8, 2011 and May 3, 2012 (the “Class Period”).
KIT digital and certain of its senior executives are charged with issuing a series of materially false and misleading statements, during the Class Period, in violation of federal securities laws.
During the class period, KIT digital was engaged in acquiring and purportedly integrating companies that were in the business of marketing end-to-end technology platforms for IP based video content providers. Under the leadership of Chairman and Chief Executive Officer Kaliel Tuzman, from May 2008 to May 2011, KIT digital acquired over a dozen other companies, using cash raised through equity sales and stock as acquisition currency. As a result of its purported success, KIT digital reported “record” setting financial results, and repeatedly upgraded its financial guidance, throughout the Class Period.
The action charges that, on May 3, 2012, investors ultimately learned that KIT digital was operating far below guidance, that the success of the integration and administration of its purchased assets had been overstated, and that the true costs of integrating and administering these acquisitions was understated.
Based on the disparity between prior guidance and KIT digital’s announced results for 1Q:12, on May 3, 2012, its shares declined precipitously – falling to an intra-day low of $4.12 per share, compared to the prior day’s close of $6.34 per share, on May 2, 2012.
It was only at that time that investors first learned that: (i) KIT digital was not achieving its projected growth in earnings and revenues; (ii) the effectiveness of the integration of purchased companies had been materially overstated; (iii) KIT digital had materially overstated its foreseeable growth and profitability, and had falsely stated that the Company was poised to achieve significant financial success; and (iv) it was not true that KIT digital contained adequate systems of controls, such that KIT digital’s representations and reports were true, accurate and reliable.
On May 3, 2012, the Wall Street Journal published a critical report on KIT digital that concluded that Kaliel Tuzman, the former CEO and board Chairman who unexpectedly resigned in April 2012, had “left a mess” at the Company. The Journal also reported that KIT digital’s new CEO would not endorse prior guidance.
Plaintiffs seek to recover damages on behalf of all Class members who purchased or otherwise acquired KIT digital securities during the Class Period. If you purchased or otherwise acquired KIT digital securities during the Class Period, and either lost money on the transaction or still hold the shares, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than July 25, 2012.
A “lead plaintiff” is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as a KIT digital shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last nine years.
You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the Southern District of New York.