BALA CYNWYD, Pa., Jan. 3, 2005 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of New Jersey on behalf of all securities purchasers of the publicly traded securities of Conexant Systems, Inc. (NASDAQ:CNXT) ("Conexant" or the "Company") during the period between March 1, 2004 and November 4, 2004 (the ``Class Period''), and former GlobespanVirata, Inc. (``Globespan'') shareholders who received shares of Conexant in the merger.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges Conexant, Dwight W. Decker, and Armando Geday with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the merger between Conexant and GlobespanVirata was plagued by integration problems; (2) that the performance of the Company's WLAN unit, the top producer of WLAN chips, was being materially impacted by the GlobespanVirata merger rather than a merely difficult market; (3) that the integration issues with the merger caused the Company to experience diminished revenue streams as demand for products diminished; (4) that Conexant remained vulnerable to the effects of weak bargaining power, commoditization and pricing pressures across most of its product portfolio, despite the company's continuing efforts to achieve differentiation based on product features and functionalities in several main target markets; and (5) that as a result of the above, the defendants' fiscal projections were lacking in any reasonable basis when made.
On July 6, 2004, Conexant announced that it expected revenues for its third fiscal quarter, which ended July 2, 2004, to be lower than anticipated due primarily to weakness in its wireless local area network ("WLAN") business. The news shocked the market. Shares of Conexant fell $1.77 per share, or 43.38 percent, on July 6, 2004, to close at $2.31 per share. On November 4, 2004, Conexant released its financial and operational results for the fourth quarter ended October 1, 2004. Fourth fiscal quarter 2004 revenues of $213.1 million decreased 20 percent from the third fiscal quarter revenues of $267.6 million. This announcement sent shares of Conexant tumbling $0.16 per share, or 9.09 percent on November 5, 2004, to close at $1.60 per share.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com
If you are a member of the class described above, you may, not later than February 15, 2005 move the Court to serve as lead plaintiff of the class, if you so choose. 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 Schiffrin & Barroway, or other counsel of your choice, to serve as your counsel in this action.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca