PHILADELPHIA, Jan. 2, 2014 /PRNewswire/ -- Cohen, Placitella & Roth, PC ("CPR") is investigating claims on behalf of investors who purchased Angie's List, Inc. ("Angie's List" or the "Company") (NASDAQ: ANGI) securities between February 14, 2013 and October 23, 2013, inclusive. The investigation concerns whether Angie's List and certain of its officers and/or directors disseminated material false and misleading information to investors in violation of Sections 10(b), and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder.
Angie's list describes itself as a consumer-driven service for its members to research, hire, rate and review local professionals for critical needs, such as home, health care and automotive services. Ratings and reviews, which are available only for the Company's members, help its members to find the best provider for their local service needs. Membership subscriptions are sold on a monthly, annual and multi-year basis. The consumer rating network "Angie's List" is maintained and updated based on member feedback. The Company also sells advertising in its monthly publication, on its website, and through its call center to service providers that meet certain rating criteria. The Company's services are provided in metropolitan areas located across the continental United States.
Specifically, CPR is investigating whether the Company and its officers and/or directors failed to disclose the following information that: (i) Angie's List was increasingly relying on providing free memberships in order to artificially boost its subscriber figures; (ii) contrary to the Company's claim that it provides its members with unbiased, online reviews, disallowing service providers from buying ratings, the Company consistently derived more than half its revenues from the service providers; (iii) that because Angie's List charged service providers hundreds of dollars for "hot leads", service providers were faced with the choice of charging above market prices for basic, run-of-the-mill services (that could be procured by consumers for cheaper prices) in order to absorb the high referral fees Angie's list was charging – or simply abandoning Angie's list; (iv) that the legitimacy of the service provider side of Angie's List business model was dubious, as service providers were forced to pay the Company thousands of dollars a year in order to be listed as a highly rated service providers, and if they did not, they would not get customer referrals from Angie's List; and (v) that Angie's List did not vet the service providers listed and recommended on its website, either for qualifications or for safety, leading many consumers to question the value of its recommendations, causing them to be unwilling to pay outsized membership fees. As a result of these omissions, the Company and its officers and directors lacked a reasonable basis for their positive statements about the Company and its business, earnings and financial prospects.
On September 30, 2013, without warning, Angie's List announced that its Chief Technology Officer had been terminated effective immediately on September 27, 2013 – without explanation – and without naming a replacement. Then, on October 2, 2013, the Wall Street Journal reported that the Company had slashed membership prices by 75% in several key markets in a bid to attract customers and was lowering its advertising costs. Finally, after the close of trading on October 23, 2013, the Company issued a press release announcing disappointing 3rd quarter earnings, increased marketing costs and reducing future 4th quarter revenues guidance. The next day, on October 24, 2013, SeekingAlpha.com published a report which stated, in pertinent part, that Angie's List had been receiving cash, booking it as "deferred revenue," then rapidly spending it at a rate that, unless the Company became profitable, it would be unable to fulfill its commitments and faced insolvency. As a result of these disclosures, the Company's stock fell from a close of $22.49 per share on September 30, 2013, to close at $14.64 on October 24, 2013, a drop of $7.55 or over 33%.
If you wish to discuss what rights you may have related to a loss in your investment in Angie's List or you have any information on the Company's business practices, please contact Eduardo Texidor Jr. at email@example.com or, toll free, at 1-888-375-7600. For those investors inquiring via email, please include "Angie's List" in the subject line, and, in the body of the email, the number of shares purchased and your mailing address and telephone number.
Since 1973, Cohen, Placitella & Roth, PC has been recognized as one of the premier trial law firms in the country. The firm has extensive experience in prosecuting securities litigation involving violations of the federal securities laws, state law derivative actions and mergers and acquisitions cases, representing institutional investors such as public pension plans and union pension funds as well as individual shareholders suffering substantial investment losses due to corporate misconduct. LexisNexis Martindale-Hubbell® annually reports Cohen, Placitella & Roth's peer rating-the highest AV® - "a testament to professional excellence." Since the inauguration of its "Best Law Firms"' edition in 2010, U.S. News and World Report has annually listed Cohen, Placitella & Roth's as one of the top-tier class action law firms in the country.
Contact: Eduardo Texidor Jr. Cohen, Placitella & Roth, PC Toll free: 1-888-375-7600 firstname.lastname@example.org
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