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ValueClick may have artifically inflated its stock price by using illegal means to generate a substantial part of its revenues.
Investigation Source (Case #07-cv-05411)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Investments
- False And Misleading Statements
- Lead Plaintiff Not Chosen
Product or Service
- Investments
Injury Type
- Monetary Loss
Investigation Details
This is a securities fraud class action lawsuit against ValueClick and certain of its officers and directors.
ValueClick describes itself as "one of the world's largest integrated online marketing companies, offering comprehensive and scalable solutions to deliver cost-effective customer acquisition for advertisers and transparent revenue streams for publishers."
The class action complaint alleges that during the Class Period, ValueClick issued false and misleading statements concerning ValueClick's sales growth, record reported revenues and earnings, strong business fundamentals, and upward earnings guidance. As a result of these false and misleading statements, ValueClick's stock rose precipitously, reaching a Class Period high of over $35 per share by May 2007. Meanwhile, ValueClick concealed from investors that ValueClick's stellar financial performance was due in large part to illegal practices, which when halted (voluntarily or through a regulatory enforcement action) would adversely impact ValueClick's lead-generation business, the ValueClick's revenues and its profits.
The class action complaint further alleges that on May 18, 2007, ValueClick announced that it was the target of an investigation by the FTC into potential FTC Act or CAN-SPAM Act violations. Yet ValueClick maintained that ValueClick was in full compliance with the law and that the FTC investigation would not negatively impact ValueClick's forward financial performance. Nonetheless, according to the complaint, ValueClick's promotional lead-generation business dropped off dramatically during May and June of 2007, significantly impacting ValueClick's ability to achieve its inflated financial targets.
Then, on July 30, 2007, ValueClick reported second quarter 2007 earnings which fell short of defendants' forecasts. ValueClick also lowered its forward financial guidance for the year. On this news, ValueClick's stock plummeted over $6 per share, falling below $20 per share in intraday trading, or 42% from its Class Period high, on very high volume.
ValueClick describes itself as "one of the world's largest integrated online marketing companies, offering comprehensive and scalable solutions to deliver cost-effective customer acquisition for advertisers and transparent revenue streams for publishers."
The class action complaint alleges that during the Class Period, ValueClick issued false and misleading statements concerning ValueClick's sales growth, record reported revenues and earnings, strong business fundamentals, and upward earnings guidance. As a result of these false and misleading statements, ValueClick's stock rose precipitously, reaching a Class Period high of over $35 per share by May 2007. Meanwhile, ValueClick concealed from investors that ValueClick's stellar financial performance was due in large part to illegal practices, which when halted (voluntarily or through a regulatory enforcement action) would adversely impact ValueClick's lead-generation business, the ValueClick's revenues and its profits.
The class action complaint further alleges that on May 18, 2007, ValueClick announced that it was the target of an investigation by the FTC into potential FTC Act or CAN-SPAM Act violations. Yet ValueClick maintained that ValueClick was in full compliance with the law and that the FTC investigation would not negatively impact ValueClick's forward financial performance. Nonetheless, according to the complaint, ValueClick's promotional lead-generation business dropped off dramatically during May and June of 2007, significantly impacting ValueClick's ability to achieve its inflated financial targets.
Then, on July 30, 2007, ValueClick reported second quarter 2007 earnings which fell short of defendants' forecasts. ValueClick also lowered its forward financial guidance for the year. On this news, ValueClick's stock plummeted over $6 per share, falling below $20 per share in intraday trading, or 42% from its Class Period high, on very high volume.