Digital Generation, Inc. Sued by Investor

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



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