SAN DIEGO and INDIANAPOLIS, Jan. 28, 2014 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of Angie's List, Inc. (NASDAQ: ANGI) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of Indiana, Indianapolis Division. The complaint alleges that the company and certain of its officers violated the Securities and Exchange Act of 1934 between February 14, 2013 and October 23, 2013 (the "Class Period"). Angie's List operates a consumer-driven website that provides customer referrals and reviews of local professionals for home, health care, and automotive service needs.
Angie's List Accused of Misrepresenting Its Business
According to the complaint, shares of Angie's List fell repeatedly between September 30, 2013 and October 24, 2013. Notably, Angie's List shares declined $2.19 per share, or approximately 10%, to close at $20.30 per share on October 1, 2013, after the company disclosed that its Chief Technology Officer had been terminated, without naming a replacement. Next, on October 2, the Wall Street Journal published an article revealing that Angie's List was lowering its membership fees in certain locales by 75%. On this news, shares of Angie's List fell an additional $3.68 per share, or more than 17%, to close at $17.31 per share on October 3, 2013. Finally, the company's stock dropped an additional $0.81 to close at $14.64 on October 24, 2013, representing a 32% overall decline, after the company disclosed that its third quarter 2013 financial results were much weaker than expected in addition to a report on SeekingAlpha.com which suggested that Angie's List would be unable to meet its future financial obligations.
The complaint also alleges that Angie's List made materially false and misleading statements to investors regarding its business and financial prospects. Specifically, Angie's List failed to disclose that: (i) it had increased its reliance on providing free memberships to artificially boost its subscriber figures; (ii) while claiming online reviews were unbiased, Angie's List was in fact, deriving more than half of its revenues from the purchase of ratings by service providers; (iii) it was charging service providers for hot leads and passing the cost to the company's subscribers; and (iv) it was not vetting service providers, making subscribers unwilling to continue to pay membership fees.
Angie's List Shareholders Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo
If you invested in Angie's List and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: www.robbinsarroyo.com/shareholders-rights-blog/angies-list-inc
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.
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SOURCE Robbins Arroyo LLP