| Company: | XM Satellite Radio Holdings, Inc. |
| Ticker Symbol: | NASD: XMSR |
| Class Period: | July 28, 2005 to February 15, 2006 |
| Date Filed: | May-03-06 |
| Lead Plaintiff Deadline: | Jul-03-06 |
| Court: | District, DC |
| Allegations: |
A class action lawsuit, numbered 06-0802 was commenced in the United States District Court for the District of Columbia before the Honorable Ellen S. Huvelle, on behalf of purchasers of the common stock of XM Satellite Radio Holdings, Inc. ("XM" or the "Company") (Nasdaq:XMSR) between July 28, 2005 and February 15, 2006, inclusive (the "Class Period").
The Complaint charges XM Satellite Radio Holdings, Inc and Hugh Panero with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 by issuing a series of materially false and misleading statements to the market during the Class Period. As alleged in the Complaint, defendants made misrepresentations and/or omissions regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality and as known to or recklessly disregarded by defendants, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005, in order to stay on track to achieve its stated goal of 6 million subscribers at year end by reason of competitive factors known to defendants since before the beginning of the Class Period. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting and touting throughout the Class Period.
During the class period, several key insiders of XM made huge sales of their personal holdings in the forth quarter of 2005, before any disclosure of the astronomical increase in XM's SAC and CPGA, taking advantage of the artificial inflation of XM's common stock. Specifically, defendant Panero sold 413,334 shares on December 6, 2005 at prices ranging between $28.37 and $28.95 to reap proceeds of $11,846,000, thus selling 99% of his holdings in XM.
On February 16, 2006 defendants issued a press release announcing XM's results for the fourth quarter 2005 and year 2005 results. They disclosed the shocking truth about the skyrocketing level of XM's subscriber acquisition costs. The market reacted negatively. With this disclosure XM's common stock, on abnormally heavy trading volume fell 13% to close at $21.96 on February 17, 2006.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The Complaint charges XM Satellite Radio Holdings, Inc and Hugh Panero with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 by issuing a series of materially false and misleading statements to the market during the Class Period. As alleged in the Complaint, defendants made misrepresentations and/or omissions regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality and as known to or recklessly disregarded by defendants, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005, in order to stay on track to achieve its stated goal of 6 million subscribers at year end by reason of competitive factors known to defendants since before the beginning of the Class Period. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting and touting throughout the Class Period.
During the class period, several key insiders of XM made huge sales of their personal holdings in the forth quarter of 2005, before any disclosure of the astronomical increase in XM's SAC and CPGA, taking advantage of the artificial inflation of XM's common stock. Specifically, defendant Panero sold 413,334 shares on December 6, 2005 at prices ranging between $28.37 and $28.95 to reap proceeds of $11,846,000, thus selling 99% of his holdings in XM.
On February 16, 2006 defendants issued a press release announcing XM's results for the fourth quarter 2005 and year 2005 results. They disclosed the shocking truth about the skyrocketing level of XM's subscriber acquisition costs. The market reacted negatively. With this disclosure XM's common stock, on abnormally heavy trading volume fell 13% to close at $21.96 on February 17, 2006.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
