NEW YORK, Feb. 2, 2015 (GLOBE NEWSWIRE) -- Wolf Popper LLP has filed a class action lawsuit against LeapFrog Enterprises, Inc. (NYSE:LF), and two of its officers, in the U.S. District Court for the Northern District of California (15-cv-0453), on behalf of all persons who purchased LeapFrog securities during the period May 6, 2014 through January 22, 2015. This action alleges claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act.
If you are a member of the Class, you may file a motion no later than March 24, 2015 to be appointed a lead plaintiff. A lead plaintiff is a representative party acting on behalf of class members in directing the litigation.
The Complaint charges that Defendants made false and/or misleading statements and/or failed to disclose, among other things: (1) that the Company was experiencing a decline in consumer demand; (2) that the Company's new LeapTV video game system launch and shipment was delayed by developmental issues; (3) that retailers were overstocked with the Company's LeapPad products; (4) that, as a result, the Company lacked a reasonable basis for its financial guidance; and (5) that, as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On January 22, 2015, LeapFrog disclosed that its financial results for the third quarter 2015 were significantly below expectations and that it would not achieve internal fiscal year guidance and consequently, it withdrew its "prior guidance for the current fiscal year ending March 31, 2015."
Further, the Company revealed that its sales shortfall was mainly due to the following factors: (1) in major territories, holiday sales of children's tablets across the toy and electronics segments declined more than expected and this fall in consumer demand resulted in lower than planned LeapFrog shipments in the quarter; (2) due to development issues, the Company shipped and promoted its LeapTV educational video game system later than planned and this delay resulted in significantly missing sales expectations; (3) lower consumer sales of LeapPad and LeapTV hardware resulted in less demand for cartridges, accessories and digital content; (4) LeapReader learn-to-read system sales were also lower than expected, partly due to a significant drop in the retail prices of children's tablets; and (5) retail in-stocks of the Company's new tablets were hampered by tighter inventory management across a number of retail partners.
On this news, LeapFrog common stock declined $1.35 per share or almost 35%, to close at $2.55 per share on January 23, 2015.
Wolf Popper has successfully recovered billions of dollars for defrauded investors. The firm's reputation and expertise have been repeatedly recognized by the courts, which have appointed the firm to major positions in securities litigation. See www.wolfpopper.com