NEW YORK, June 7, 2013 (GLOBE NEWSWIRE) -- Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against Digital Generation, Inc. ("Digital Generation" or the "Company") (Nasdaq:DGIT) and certain of its officers. The class action, filed in United States District Court, Northern District of Texas, and docketed under 3:13-cv-1684, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of Digital Generation between June 20, 2011 and February 19, 2013, both dates inclusive (the "Class Period"). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Digital Generation securities during the Class Period, you have until July 1, 2013 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at email@example.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Digital Generation purports to be the "world's leading ad management and distribution platform." The Company claims to connect over 12,000 global advertisers and 5,000 agencies with their targeted audiences through an expansive network of over 40,000 media destinations across broadcast and digital in 75 countries, managing approximately ten percent of the world's media assets.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company's business, financial performance, and prospects. During the Class Period, Digital Generation touted itself as a Company achieving steady and consistent growth, and poised for a strategic buyout on the basis of the Company's strong performance and diversification. In order to cultivate this image, defendants made a series of false and/or misleading statements regarding its growth and value of its acquisitions, failing to disclose that: (i) the Company's online segment was grossly underperforming, and well below the value reported to investors; (ii) past acquisitions had masked the Company's declining revenue base; (iii) the Company had vastly overpaid for its acquisition of Media Mind, Inc. ("Media Mind") and other online segments 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 of the above, the Company's financial statements were materially false and misleading at all relevant times.
On November 8, 2012, the Company reported that for the quarter ending September 30, 2012, an impairment charge of over $208 million was taken against the online media assets it had just recently acquired: Media Mind, Inc., Eye Wonder and Peer 39. This impairment represented a staggering 33% write-down of the initial purchase price of these assets. The Company also reported that its television unit took an impairment charge of over $131 million.
On February 19, 2013, the Company issued a press release announcing that a Special Committee of the Company's Board of Directors had failed to approve any transaction or strategic alternative. In addition, the Company recorded an additional $11.4 million write-down of its recently acquired online segments.
On this news, the Company's shares declined $2.53 per share or over 28% to close on February 19, 2013 at $6.45 per share.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
CONTACT: Robert S. Willoughby Pomerantz Grossman Hufford Dahlstrom & Gross LLP firstname.lastname@example.org