NEW YORK, Jan. 9, 2014 /PRNewswire/ -- Pomerantz LLP has filed a class action lawsuit against Angie's List, Inc. ("Angie's List" or the "Company")(NASDAQ: ANGI) and certain of its officers. The class action, filed in United States District Court, Southern District of Indiana, and docketed under 14-cv 0023LJM-MJD, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Angie's List securities between February 14, 2013 and October 23, 2013 both dates inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a shareholder who purchased Angie's List securities during the Class Period, you have until February 24, 2014 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Angie's List, Inc. operates a consumer-driven solution for its members to research, hire, rate, and review local professionals for home, health care, and automotive service needs.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) Angie's List had increased its reliance on providing free memberships in order to artificially boost its subscriber figures; (ii) that 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, 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) that 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) that 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) that 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.
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 $20.99 on October 2, 2013 to close at $14.64 on October 24, 2013, a decline of over 30.25%, on unusually high trading volume.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
SOURCE Pomerantz Grossman Hufford Dahlstrom & Gross LLP