BALA CYNWYD, Pa., March 10, 2003 (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 Southern District of New York on behalf of all purchasers of the common stock of Alloy Inc. ("Alloy" or the "Company" ) (Nasdaq:ALOY), from August 1, 2002 through January 23, 2003, inclusive (the "Class Period").
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 Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The complaint charges that defendants Alloy, Matthew C. Diamond (CEO), James K. Johnson Jr. (President and COO) and Samuel A. Gradess (CFO) violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 1, 2002 and January 23, 2003. Alloy is a teen-focused media company and direct marketer that targets Generation Y consumers, i.e. the approximately 60 million people in the United States between the ages of 10 and 24.
The complaint alleges that the Company claimed that its merchandising and advertising segments complemented one another in a way that gave the Company an edge over competitor teen retailers and media businesses and which would enable it to succeed despite difficult market conditions in the second half of 2002. Unbeknownst to investors, the Company faced fierce competition for the youth market and the weak economy forced the Company to cut its prices and increase operating expenses, e.g. by offering free shipping and deep discounts, thereby eroding Alloy's gross profit margin.
On January 23, 2003, the Company shocked the market by announcing that EBTA for its fiscal fourth quarter ending January 31, 2003 would be $11 million to $12 million instead of the previously projected $15 million to $16 million and that fiscal 2002 EBTA would be in the range of $30 to $31 million instead of the previously forecast $34 million to $38 million. On this news, the Company's share priced plummeted by 49%, or $4.57, from the previous day's closing price of $9.10.
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/cgi/signup.cgi.
If you are a member of the class described above, you may, not later than May 6, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca