NEW YORK, March 4, 2005 (PRIMEZONE) -- The law firm Seeger Weiss LLP announces that it filed a class action lawsuit today in the United States District Court for the District of Minnesota on behalf of purchasers of Gander Mountain Company ("Gander Mountain") (Nasdaq:GMTN) common stock pursuant to the Company's Initial Public Offering ("IPO") and in the open market between April 20, 2004 and January 13, 2005 (the "Class Period"). The complaint seeks remedies for the class under the Securities Exchange Act of 1934 (the "Exchange Act") and the Securities Act of 1933.
Gander Mountain is a specialty retailer offering an assortment of merchandise that caters to outdoor lifestyle enthusiasts, with a particular focus on hunting, fishing and camping. The complaint alleges that prior to going public, and afterward, Gander Mountain was controlled by the Erickson family, including the defendants named in the complaint, through their individual ownership in the Company and through their holdings in the Company's major shareholders. Defendants knew that unless the Company went public, their shares in the Company would remain illiquid, and virtually worthless. Further, the complaint alleges that defendants also knew that unless Gander Mountain went public prior to revelations of lowered earnings expectations in November 2004 and January 2005, the Company would be prevented from going public altogether. This possibility would not only jeopardize defendants' ability to infuse value and liquidity into their shares via the IPO, but also would jeopardize the Company's ability to repay a $9.8 million debt owed to a company owned by the Erickson family.
On April 26, 2004, Gander Mountain closed its IPO, raising in excess of $105 million. On November 9, 2004, the Company announced it had "lowered its outlook for pretax income for fiscal 2004 to a range of $8 million to $13 million, compared with the company's prior guidance of $16 million to $21 million." Then, on January 14, 2005, the Company issued a press release lowering its outlook for pretax income for fiscal 2004 even further, "to a range of $2.0 million to $4.0 million, compared with the company's prior guidance of $8 million to $13 million." On this news, the Company's shares plunged to an all-time low of $9.30 per share, more than a 60% drop from the Class Period high of $24.65 on June 7, 2004.
According to the complaint, the true facts, which were allegedly known to each of the defendants during the Class Period and concealed from the public, were as follows: (a) the Company's co-branded credit card promotions were not effective; (b) the value of the Company's inventory was overstated, which required Gander Mountain to offer between 40% and 60% discounts on merchandise in order to sell it; (c) the Company was funding its overly aggressive expansion by borrowing above its revolving credit line; (d) the Company was having difficulties establishing a branding direction with its merchandise, by constantly changing the products and services it offered customers; (e) the Company had negative comparable same store sales; and (f) as a result of the foregoing, defendants' own projections of positive comparable sales growth of 3%-5% and pretax income of $8-$13 million were materially false and misleading.
Seeger Weiss is a New York-based law firm that is active in major complex litigations and class actions pending in federal and state courts throughout the United States. Seeger Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers and others and has recovered millions of dollars for class members.
If you bought the securities of Gander mountain between April 20, 2004 and January 13, 2005, and sustained damages, you may, not later than March 29, 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 Seeger Weiss LLP, or other counsel of your choice, to serve as your counsel in this action.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact us:
Stephen A. Weiss, Esq. Eric T. Chaffin, Esq. Seeger Weiss LLP One William Street New York, New York 10004 E-Mail: sweiss@seegerweiss.com echaffin@seegerweiss.com Tel.: (212) 584-0700 Toll Free: (877) 541-3273 www.seegerweiss.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca