NEW YORK– LAWFUEL – The Law Newswire –Lerach Coughlin Stoia Geller Rudman & Robbins LLP (“Lerach Coughlin”) (http://www.lerachlaw.com/cases/netlist/) today announced that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Netlist, Inc. (“Netlist” or the “Company”) (NASDAQ:NLST) who purchased the common stock of Netlist pursuant and/or traceable to the Company’s initial public offering on or about November 29, 2006 through April 17, 2007, seeking to pursue remedies under the Securities Act of 1933 (the “Securities Act”). This action concerns the initial public offering of Netlist common stock which took place on or about November 29, 2006 (the “IPO” or the “Offering”).
If you wish to serve as lead plaintiff, you must move the Court no later than July 27, 2007. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Lerach Coughlin at 800/449-4900 or 619/231-1058 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/netlist/. 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 Netlist and certain of its officers and directors with violations of the Securities Act of 1933. The Company engages in the design, manufacture, and sale of memory subsystems for the server, computing, and communications markets in the United States.
According to the complaint, at the time of the IPO: (a) two of the Company’s primary customers, Dell and IBM, were over inventoried with product and would be reducing their purchases in the future until they worked through their inventory; (b) the Company was experiencing declining margins due to, among other things, an unfavorable sales mix of products; and (c) the Company’s new products were having difficulty gaining market acceptance. On November 30, 2006, the Prospectus (the “Prospectus”) with respect to the IPO, which forms part of the Registration Statement, became effective and 6.25 million shares of Netlist’s common stock were sold to the public at $7 per share, thereby raising more than $43 million. The complaint alleges that the Prospectus failed to disclose these material facts.
Then, on April 16, 2007, Netlist announced that revenues and earnings for the first quarter of 2007 would be lower than its previous guidance – given only two and a half months prior to this announcement. The Company also announced weak guidance for the second quarter of 2007. In response to this announcement, on April 17, 2007, the price of Netlist stock declined precipitously falling from $5.97 per share to $4.29 per share – approximately 40% below the IPO price – on heavy trading volume.
Plaintiff seeks to recover damages on behalf of all those who purchased the common stock of Netlist pursuant and/or traceable to the Company’s IPO on or about November 29, 2006 through April 17, 2007. The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $45 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.
