Faruqi & Faruqi, LLP Encourages Investors Who Suffered Losses In Excess Of $100,000 Investing In Digital Generation, Inc. To Contact The Firm
NEW YORK, May 6, 2013 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Digital Generation, Inc. ("Digital Generation" or the "Company") (NASDAQ: DGIT).
The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) Digital Generation's online segment was performing significantly below levels reported to investors; (2) Digital Generation's declining revenue base was being hidden behind Company acquisitions; (3) the Company had substantially overpaid for its acquisition of Media Mind, Inc. ("Media Mind") and other online segments in order to appear to be an attractive acquisition target; and (4) the Company was not sufficiently poised for a strategic partnership or buyout.
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 three of the online media assets it had recently acquired: Media Mind, Eye Wonder, and Peer 39. This impairment represented a staggering 33% write-down of the initial purchase price of these assets. Digital Generation also reported that the Company's 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 after exploring numerous options available to the Company, including a sale of all or parts of the business, a spin-off and split-off of parts of the business, capital structure alternatives, or potential merger combinations. In addition, the Company recorded a further $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.
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If you invested in Digital Generation stock or options between June 20, 2011 and February 19, 2013 and would like to discuss your legal rights, visit www.faruqilaw.com/DGIT. You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org or email@example.com. Faruqi & Faruqi, LLP also encourages anyone with information regarding Digital Generation's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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FARUQI & FARUQI, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
Francis McConville, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
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