HARTFORD, Conn., Oct. 22 -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Eastern District of Michigan on behalf of all persons who purchased the publicly traded securities of Valassis Communications, Inc. between April 25, 2002 and October 23, 2002, inclusive (the "Class Period").
The Complaint alleges that Valassis, a company that prints, markets and distributes coupons and newspaper advertising inserts, and certain of its officers and directors issued materially false statements concerning Valassis' performance and future prospects, causing Valassis' shares to trade at artificially inflated levels. Specifically, defendants knew, but failed to disclose: (i) that the price increase implemented by the Company in 2001 in its free-standing inserts business and then retracted in February 2002 was negatively impacting the Company's ability to win contracts; (ii) that the Company was experiencing increased competition from News America who was offering customers lower prices and longer contract terms; and (iii) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and their earnings forecasts which were false when made.
On October 24, 2002, Valassis released its financial and operational results for the third quarter ended September 30, 2002, and shocked the market when it announced that it would dramatically lower its earnings' guidance for 2003 to $2.22 per share, well below analysts' consensus of $2.70 per share. On this news, Valassis stock fell from a close of $34.96 on October 23, 2002 to a close of $26.01, a decline of more than 25%.
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