Focus Media Holdings may have misled investors in its secondary offering about its financial operations as Focus Media failed to disclose that recent acquisitions were negatively affecting gross margins.
This is a securities fraud class action lawsuit brought on behalf of purchasers of the American Depositary Shares of Focus Media Holding Limited in the Company's secondary public offering on or about November 7, 2007.
Focus Media operates out-of-home advertising network using audiovisual television displays in the People's Republic of China.
On November 6, 2007, FOcus Media raised $888 million in a secondary public offering.
The class action complaint alleges that the Registration Statement and the Prospectus contained inaccurate statements of material fact because they failed to disclose that Focus Media had made numerous acquisitions in its Internet advertising business division which were depressing its gross margins in that important division.
On November 19, 2007, after the close of the market, Focus Media issued a press release announcing its financial results for the third quarter of 2007, the period ending September 30, 2007. Among other things, Focus Media reported that its gross margins for the third quarter of 2007 had declined due to several recent acquisitions.
Following Focus Media's earnings release, on November 20, 2007, the price of Focus Media ADSs dropped from $57.15 per ADS to $52.00 per ADS on extremely heavy trading volume.
Name (Stock Symbol)
Focus Media Holding, Ltd. (FMCN)
Focus Media Holding Limited operates out-of-home advertising network using audiovisual digital displays in China. Its advertising network consists of commercial location network comprising LCD display network, outdoor LED billboard network, and movie theater advertising network; in-store network; poster frame network; mobile handset advertising network; and Internet advertising services network.
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