SAN DIEGO, Calif. and
IRVING, Texas, May 13, 2013 /PRNewswire/ -- Shareholder
rights attorneys at Robbins Arroyo LLP announce that a purchaser of
Digital Generation, Inc. (NASDAQ: DGIT) securities has filed a
complaint in the U.S. District Court for the Northern District of
Texas. The complaint alleges that Digital Generation and
certain of its officers and directors violated the Securities
Exchange Act of 1934 between June 20,
2011 and February 19, 2013
(the "Class Period").
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Digital Generation Is Accused of Making False and
Misleading Statements to Induce a Strategic Buyout
The complaint alleges that during the Class Period, Digital
Generation and certain of its officers and directors issued a
series of materially false and misleading statements concerning the
true nature of the company's operations, financial performance, and
prospects. Specifically, the complaint alleges that certain
officers and directors promoted the company as a strong candidate
for a strategic buyout based on the company's strong performance
and diversification. According to the complaint, company
officials cultivated this image through a series of false and/or
misleading statements regarding its growth and the value of several
acquisitions made during the Class Period. Those statements
were false and misleading because they failed to disclose that: (i)
the company's online segment performance was well below the value
reported to investors; (ii) prior acquisitions had masked the
company's declining revenue base; (iii) the company had vastly
overpaid for its acquisition of online segments, including Media
Mind, Inc. ("Media Mind"), in order to appear to be an attractive
acquisition target; (iv) the company was not sufficiently poised
for a strategic partnership or buyout; and (v) as a result, the
company's financial statements were materially false and misleading
during the Class Period.
Digital Generation Stock Price Falls
Dramatically
On November 8, 2012, Digital
Generation announced that for the quarter ending September 30, 2012, the company would take an
impairment charge of over $208
million against recently acquired online media assets,
including Media Mind, and a $131
million impairment charge in its television unit. The
$208 million impairment charge
represented a 33% write-down of the purchase price of those
assets.
On February 19, 2013, the
complaint alleges, Digital Generation announced an additional
write-down of online segments of $11.4
million. In addition, the company announced that a
Special Committee of the board of directors had failed to attract a
buyout partner or strategic alternative. As a result of this
news, Digital Generation's stock price dropped more than 28%, or
$2.53 per share, to close at
$6.45 per share.
If you purchased or otherwise acquired Digital Generation stock
during the Class Period and wish to serve as lead plaintiff, you
must act no later than July 1,
2013. To discuss your shareholder rights, please contact
attorney Darnell R. Donahue at (800)
350-6003, ddonahue@robbinsarroyo.com, or via the shareholder
information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
securities litigation and shareholder rights law. The firm
represents individual and institutional investors in shareholder
derivative and securities class action lawsuits, and has helped its
clients realize more than $1 billion
of value for themselves and the companies in which they have
invested. For more information, please go to
http://www.robbinsarroyo.com.
Press release link:
http://www.robbinsarroyo.com/shareholders-rights-blog/digital-generation-inc/
Attorney Advertising. Past results do not guarantee a
similar outcome.
Contact:
Darnell R. Donahue
Robbins Arroyo LLP
ddonahue@robbinsarroyo.com
(619) 525-3990 or Toll Free at (800) 350-6003
http://www.robbinsarroyo.com
SOURCE Robbins Arroyo LLP
