MILWAUKEE, Dec. 22, 2004 (PRIMEZONE) -- Ademi & O'Reilly, LLP (http://www.ademilaw.com/cases/Conexant.php) today announced it has commenced a class action lawsuit in the United States District Court for the District of New Jersey on behalf of purchasers of Conexant Systems, Inc. ("Conexant") (Nasdaq:CNXT) publicly traded securities 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 serve as lead plaintiff, you must move the Court no later than February 15, 2005. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Guri Ademi at 866-264-3995, or via e-mail at gademi@ademilaw.com. If you are a member of this class, you can view a copy of the complaint or join this class action online at http://www.ademilaw.com/cases/Conexant.php. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Conexant and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Conexant is a fabless semiconductor company. The complaint alleges that on March 1, 2004, Conexant completed its acquisition of Globespan in a merger transaction claiming that "We have made outstanding progress toward integrating the organizations, systems, technologies and processes of Conexant and GlobespanVirata over the past two months and are in a strong position as we begin combined operations today." In fact, as would later be admitted, the merger had not been successful and the Company was facing severe integration problems with respect to the combined companies' parallel DSL and wireless technology offerings, as well as their sales and administration functions. Additionally, Conexant would claim throughout the Class Period that its wireless LAN ("WLAN") business was experiencing reduced growth, citing competition from Taiwan-based chip suppliers when, in fact, its WLAN business, which had been the premier and top producer for wireless local area networks, was not being integrated properly in the merger, and defendants were neglecting to develop and build products, resulting in massive loss of market share.
On November 4, 2004, Conexant released its financial and operational results for the fourth quarter ended October 1, 2004, reporting that its "fourth fiscal quarter 2004 revenues of $213.1 million decreased 20 percent from the third fiscal quarter revenues of $267.6 million," and stating that "'Conexant's sequential decline in revenues to $213.1 million in the fourth fiscal quarter was largely due to excess channel inventory that resulted from lower-than-expected customer demand ...'" On this news Conexant stock fell 10% on November 5, 2004.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.