NEW YORK, Jan. 2, 2014 /PRNewswire/ -- Bernstein Liebhard LLP today announced that a class action has been commenced in the United States District Court for the Southern District of Indiana on behalf of purchasers (the "Class") of common stock of Angie's List, Inc. ("Angie's List") (NASDAQ: ANGI) during the period of February 14, 2013 and October 23, 2013 (the "Class Period").
The complaint charges Angie's List and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Angie's List operates a website that provides subscription-based reviews of local service providers, purportedly authored by other locals, and referrals to local service providers to consumers across the United States.
The complaint alleges that during the Class Period, Angie's List issued materially false and misleading statements regarding the strength of the Company's business model and its financial performance and future prospects and failed to disclose the following adverse facts: (i) Angie's List had increased its reliance on providing free memberships in order to artificially boost its subscriber figures; (ii) contrary to Angie's List's repeated Class Period statements that the online reviews were unbiased because Angie's List did not permit service providers to buy ratings on its website ("You can't pay to be on Angie's List"), the Company was consistently deriving more than half of its revenues from the service provider side of its business – where it relied heavily on collecting fees for listing paid service providers more prominently; (iii) because Angie's List sometimes charged service providers hundreds of dollars for "hot leads," those costs were being passed along to Angie's List subscribers, increasing the prices consumers were paying and decreasing the benefit to them of using the website; (iv) the legitimacy of the service provider side of Angie's List's business model was called into question by Angie's List's practice of forcing service providers to pay high fees to be listed as highly rated service providers, knowing that if they did not, they would not get customer referrals from Angie's List; (v) because Angie's List did not vet the service providers listed and recommended on its website, either for qualifications or for safety, many consumers were questioning the value of its recommendations, making them unwilling to continue paying outsized membership fees; and (vi) as a result of the foregoing, Defendants lacked a reasonable basis for their positive statements about the strength of Angie's List's business model and its business and financial prospects during the Class Period.
The complaint alleges that through a series of disclosures between September 30, 2013 and October 24, 2013, investors learned that: (i) Angie's List's Chief Technology Officer had been terminated – without explanation or naming a replacement; (ii) Angie's List had slashed membership prices by roughly 75% in several key markets, in a bid to attract new members; (iii) the Company's third quarter 2013 financial results were much weaker than Defendants had led the market to expect, and the same declining business metrics had forced Angie's List to issue weaker fourth quarter 2013 financial guidance; and (iv) certain analysts were questioning the Company's ability to meet its future financial obligations. On this news, the price of Angie's List common stock declined precipitously, erasing millions of dollars in market capitalization.
Plaintiffs seek to recover damages on behalf of all Class members who invested in Angie's List common stock during the Class Period. If you invested in Angie's List common stock as described above, and either lost money on the transaction or still hold the security, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than February 24, 2014.
A "lead plaintiff" is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
If you are interested in discussing your rights as an Angie's List shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. It has been named to The National Law Journal's "Plaintiffs' Hot List" in each of the last ten years.
You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the Southern District of Indiana.
Bernstein Liebhard LLP 10 East 40th Street New York, New York 10016 (877) 779-1414 www.bernlieb.com
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SOURCE Bernstein Liebhard LLP