Pendency of Class Action Against Gateway, Inc. Announced by Milberg Weiss

Apr 12, 2001, 01:00 ET from Milberg Weiss Bershad Hynes & Lerach LLP

    SAN DIEGO, April 12 /PRNewswire/ -- Milberg Weiss
 (http://www.milberg.com/gateway/) today announced that a securities class
 action has been filed in the United States District Court for the Southern
 District of California on behalf of purchasers of Gateway, Inc. ("Gateway")
 (NYSE:   GTW) common stock between April 14, 2000 and February 28, 2001 (the
 "Class Period").  Thereafter, by Order of the Southern District Court entered
 March 29, 2001, the Court held as follows:  "To ensure that Plaintiffs' Motion
 to Consolidate encompasses all pending related actions and that all parties
 have an opportunity to respond to the motions, the April 9, 2001 hearing is
 hereby continued to May 21, 2001."
     If you wish to become involved in this action, discuss the action or have
 any questions concerning this notice or your rights or interests, please
 contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss
 at 800/449-4900 or via e-mail at wsl@milberg.com.  You can join this action
 online at http://www.milberg.com/gateway/.
      The complaint, prepared and filed by Milberg Weiss after an extensive
 investigation, charges Gateway and Theodore W. Waitt, Gateway's Chief
 Executive Officer and Chairman, and John J. Todd, Gateway's former Chief
 Financial Officer, with violations of the Securities Exchange Act of 1934.
 The complaint alleges that Gateway reported favorable financial results for
 Q1-Q3 2000 in documents filed with the Securities and Exchange Commission
 ("SEC"), various press releases and other public statements.  The complaint
 alleges that these statements were materially false and misleading because
 defendants improperly recognized revenue and failed to write down Gateway's
 impaired investments and losses from loans as required by Generally Accepted
 Accounting Principles ("GAAP").  Defendants also issued a series of allegedly
 false and misleading statements concerning Gateway's business operations and
 prospects for Q4 2000.  Plaintiff alleges that defendants knew that Gateway's
 business was faltering, that its Q1-Q3 2000 results were false and that during
 Q4 2000 its operations had stumbled badly and that this would devastate
 Gateway's share price, if disclosed publicly.  Despite this knowledge,
 defendants claimed that Gateway would achieve earnings per share ("EPS")
 growth of almost 50% in Q4 2000 and even went so far as to claim that Gateway
 shares were significantly "undervalued."  On November 20, 2000, defendants
 issued a press release over a national news wire service which proclaimed that
 Gateway would achieve the Q4 2000 results of $0.62 EPS that they had
 forecasted.
     On November 29, 2000, Gateway issued a press release in which it was
 revealed that defendants' claims of solid Q4 2000 results and the Company's
 projected results for fiscal 2000 were not as defendants claimed.  Defendants
 then admitted that Gateway would not achieve Q4 2000 growth of almost 50% but
 instead would report absolutely no growth at all and would likely report
 losses.  Defendants' release also revealed that Gateway would take a $200
 million charge for impairment in Q4 2000.  The market reaction to this news
 was swift, as Gateway's stock price fell from $31 to less than $20 in two
 days, on huge volume of 23 million shares.
     On February 28, 2001, Gateway conceded that its previously reported
 results for Q1-Q4 2000 had been overstated, and that its financial results for
 fiscal 2000 would be revised.  Gateway acknowledged that it had recorded
 revenues before they were earned, in violation of GAAP and SEC rules.  Gateway
 also restated its Q1-Q4 2000 results because of certain accounting
 irregularities at a foreign subsidiary and because it improperly failed to
 account adequately for loan losses against Gateway's receivables.  Gateway
 shares continued to plunge, falling to $15-1/2 on March 1, 2001.  However,
 prior to the ultimate disclosure of defendants' improprieties, the complaint
 alleges that defendant Waitt pocketed nearly $400 million in insider trading
 proceeds via his sales of Gateway shares during the Class Period.
     Due to defendants' GAAP violations, Gateway's earlier reported Q1-Q4 2000
 financial results were materially overstated.  For example, cumulative net
 sales, operating income and net income for the nine months ended Q3 2000 were
 overstated by $126 million, $44 million and $41 million, respectively, and
 Gateway's fiscal 2000 net income was overstated 30%.
     Plaintiff claims that had Gateway accurately reported the results of its
 operations during 2000, it would have received 2000 earnings growth of
 approximately 50% less than that claimed by defendants.  And, instead of
 achieving the Q4 2000 net income growth of 47% promised by defendants, Gateway
 actually reported a loss for Q4 2000 and a decrease in net income compared to
 1999 of over 40% ($428 million for 1999 versus $241 million for 2000).
 Plaintiff seeks to recover damages on behalf of all purchasers of Gateway
 common stock during the Class Period (the "Class").  The plaintiff is
 represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in
 prosecuting investor class actions and extensive experience in actions
 involving financial fraud.
     Milberg Weiss Bershad Hynes & Lerach LLP, a 170-lawyer firm with offices
 in New York, San Diego, San Francisco, Los Angeles, Boca Raton, Seattle and
 Philadelphia, is active in major litigations pending in federal and state
 courts throughout the United States.  Milberg Weiss has taken a leading role
 in many important actions on behalf of defrauded investors, consumers, and
 companies, as well as victims of World War II and other human rights
 violations, and has been responsible for more than $30 billion in aggregate
 recoveries.  The Milberg Weiss website (http://www.milberg.com) has more
 information about the firm.
 
 

SOURCE Milberg Weiss Bershad Hynes & Lerach LLP
    SAN DIEGO, April 12 /PRNewswire/ -- Milberg Weiss
 (http://www.milberg.com/gateway/) today announced that a securities class
 action has been filed in the United States District Court for the Southern
 District of California on behalf of purchasers of Gateway, Inc. ("Gateway")
 (NYSE:   GTW) common stock between April 14, 2000 and February 28, 2001 (the
 "Class Period").  Thereafter, by Order of the Southern District Court entered
 March 29, 2001, the Court held as follows:  "To ensure that Plaintiffs' Motion
 to Consolidate encompasses all pending related actions and that all parties
 have an opportunity to respond to the motions, the April 9, 2001 hearing is
 hereby continued to May 21, 2001."
     If you wish to become involved in this action, discuss the action or have
 any questions concerning this notice or your rights or interests, please
 contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss
 at 800/449-4900 or via e-mail at wsl@milberg.com.  You can join this action
 online at http://www.milberg.com/gateway/.
      The complaint, prepared and filed by Milberg Weiss after an extensive
 investigation, charges Gateway and Theodore W. Waitt, Gateway's Chief
 Executive Officer and Chairman, and John J. Todd, Gateway's former Chief
 Financial Officer, with violations of the Securities Exchange Act of 1934.
 The complaint alleges that Gateway reported favorable financial results for
 Q1-Q3 2000 in documents filed with the Securities and Exchange Commission
 ("SEC"), various press releases and other public statements.  The complaint
 alleges that these statements were materially false and misleading because
 defendants improperly recognized revenue and failed to write down Gateway's
 impaired investments and losses from loans as required by Generally Accepted
 Accounting Principles ("GAAP").  Defendants also issued a series of allegedly
 false and misleading statements concerning Gateway's business operations and
 prospects for Q4 2000.  Plaintiff alleges that defendants knew that Gateway's
 business was faltering, that its Q1-Q3 2000 results were false and that during
 Q4 2000 its operations had stumbled badly and that this would devastate
 Gateway's share price, if disclosed publicly.  Despite this knowledge,
 defendants claimed that Gateway would achieve earnings per share ("EPS")
 growth of almost 50% in Q4 2000 and even went so far as to claim that Gateway
 shares were significantly "undervalued."  On November 20, 2000, defendants
 issued a press release over a national news wire service which proclaimed that
 Gateway would achieve the Q4 2000 results of $0.62 EPS that they had
 forecasted.
     On November 29, 2000, Gateway issued a press release in which it was
 revealed that defendants' claims of solid Q4 2000 results and the Company's
 projected results for fiscal 2000 were not as defendants claimed.  Defendants
 then admitted that Gateway would not achieve Q4 2000 growth of almost 50% but
 instead would report absolutely no growth at all and would likely report
 losses.  Defendants' release also revealed that Gateway would take a $200
 million charge for impairment in Q4 2000.  The market reaction to this news
 was swift, as Gateway's stock price fell from $31 to less than $20 in two
 days, on huge volume of 23 million shares.
     On February 28, 2001, Gateway conceded that its previously reported
 results for Q1-Q4 2000 had been overstated, and that its financial results for
 fiscal 2000 would be revised.  Gateway acknowledged that it had recorded
 revenues before they were earned, in violation of GAAP and SEC rules.  Gateway
 also restated its Q1-Q4 2000 results because of certain accounting
 irregularities at a foreign subsidiary and because it improperly failed to
 account adequately for loan losses against Gateway's receivables.  Gateway
 shares continued to plunge, falling to $15-1/2 on March 1, 2001.  However,
 prior to the ultimate disclosure of defendants' improprieties, the complaint
 alleges that defendant Waitt pocketed nearly $400 million in insider trading
 proceeds via his sales of Gateway shares during the Class Period.
     Due to defendants' GAAP violations, Gateway's earlier reported Q1-Q4 2000
 financial results were materially overstated.  For example, cumulative net
 sales, operating income and net income for the nine months ended Q3 2000 were
 overstated by $126 million, $44 million and $41 million, respectively, and
 Gateway's fiscal 2000 net income was overstated 30%.
     Plaintiff claims that had Gateway accurately reported the results of its
 operations during 2000, it would have received 2000 earnings growth of
 approximately 50% less than that claimed by defendants.  And, instead of
 achieving the Q4 2000 net income growth of 47% promised by defendants, Gateway
 actually reported a loss for Q4 2000 and a decrease in net income compared to
 1999 of over 40% ($428 million for 1999 versus $241 million for 2000).
 Plaintiff seeks to recover damages on behalf of all purchasers of Gateway
 common stock during the Class Period (the "Class").  The plaintiff is
 represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in
 prosecuting investor class actions and extensive experience in actions
 involving financial fraud.
     Milberg Weiss Bershad Hynes & Lerach LLP, a 170-lawyer firm with offices
 in New York, San Diego, San Francisco, Los Angeles, Boca Raton, Seattle and
 Philadelphia, is active in major litigations pending in federal and state
 courts throughout the United States.  Milberg Weiss has taken a leading role
 in many important actions on behalf of defrauded investors, consumers, and
 companies, as well as victims of World War II and other human rights
 violations, and has been responsible for more than $30 billion in aggregate
 recoveries.  The Milberg Weiss website (http://www.milberg.com) has more
 information about the firm.
 
 SOURCE  Milberg Weiss Bershad Hynes & Lerach LLP