NEW YORK, May 15, 2006 (PRIMEZONE) -- The law firm of Wechsler Harwood LLP has filed a lawsuit on behalf of purchasers of the common stock of XM Satellite Radio Holdings, Inc. (Nasdaq:XMSR) ("XM" or the "Company"), between July 28, 2005, and February 15, 2006, inclusive (the "Class Period"), in the United States District Court for the District of Columbia.
The Complaint charges XM Satellite Radio Holdings, Inc., and its President and Chief Executive Officer, Hugh Panero, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the market during the Class Period. As alleged in the Complaint, defendants made misrepresentations and/or omissions regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality, and as known to or recklessly disregarded by defendants, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005 in order to stay on track to achieve its stated goal of 6 million subscribers at year end by reason of competitive factors known to defendants since before the beginning of the Class Period. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting and touting throughout the Class Period.
During the class period, several key insiders of XM made huge sales of their personal holdings in the fourth quarter of 2005, taking advantage of the artificial inflation of XM's common stock. Specifically, defendant Panero sold 413,334 shares on December 6, 2005, at prices ranging between $28.37 and $28.95 to reap proceeds of $11,846,000, thus selling 99% of his holdings in XM.
On February 16, 2006, defendants issued a press release announcing XM's results for the fourth quarter 2005 and year 2005 results. They disclosed the shocking truth about the skyrocketing level of XM's subscriber acquisition costs. The market reacted negatively. With this disclosure, XM's common stock, on abnormally heavy trading volume, fell 13% to close at $21.96 on February 17, 2006.
If you purchased or acquired XM common stock during the Class Period, you may, no later than July 3, 2006, move the court to be appointed as Lead Plaintiff. There are certain legal requirements to serve as Lead Plaintiff.
Any member of the purported class may move the court to serve as Lead Plaintiff through counsel of their choice or may choose to remain an absent class member. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as Lead Plaintiff. To be a member of the class, you need not take any action at this time.
This firm's reputation for excellence has been recognized on repeated occasions by courts that have appointed it to lead positions in complex multi-district or consolidated litigation. Wechsler Harwood LLP has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total in the hundreds of millions of dollars. You may visit the firm's website at www.whesq.com, to view a copy of the complaint.
If you wish to discuss this action or have any questions concerning this case or your rights or interests, please contact:
Virgilio Soler, Jr., Shareholder Relations Department re: XM Satellite Radio, vsoler@whesq.com at Wechsler Harwood LLP, 488 Madison Avenue, New York, New York 10022, tel., (toll free) 1-877-935-7400
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.