Milberg Weiss Announces The Filing Of A Class Action Suit Against Pixar and Certain Of Its Officers and Directors on Behalf of I
October 21 2005 - 7:29PM
Business Wire
The law firm of Milberg Weiss Bershad & Schulman LLP announces
that a class action lawsuit was filed today, on behalf of all
persons who purchased or otherwise acquired the securities of Pixar
(or the "Company") (Nasdaq: PIXR), between January 18, 2005 and
June 30, 2005, inclusive (the "Class Period"), seeking to pursue
remedies under the Securities Exchange Act of 1934 (the "Exchange
Act"). A copy of the complaint filed in this action is available
from the Court, or can be viewed on Milberg Weiss's website at:
http://www.milbergweiss.com If you purchased or otherwise acquired
the securities of Pixar between January 18, 2005 and June 30, 2005,
inclusive, and sustained damages, you may, no later than December
20, 2005, request that the Court appoint you as lead plaintiff. 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 Milberg Weiss Bershad & Schulman LLP,
or other counsel of your choice, to serve as your counsel in this
action. The action, Civil Action number C-05-4290JSW, is pending
before the Honorable Jeffrey S. White, in the United States
District Court for the Northern District of California against
defendants Pixar, Steve P. Jobs (Chairman and CEO), Edwin E.
Catmull (President), and Simon T. Bax (CFO and Executive VP).
According to the complaint, defendants violated sections 10(b) and
20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of
material misrepresentations to the market during the Class Period.
The complaint alleges that Pixar creates, develops, and produces
animated films and related products. During the Class Period, the
Company had a co-production agreement with The Walt Disney Company
("Disney") for the development and production of animated
feature-length theatrical motion pictures. Defendants claimed that
one such film, The Incredibles, was a "Box-Office smash hit" and
would also be successful in the home video market. According to the
complaint, defendants stated, among other things, that during the
Class Period, sales of The Incredibles home videos, including DVDs
and VHS, would enable the Company to produce earnings of at least
$0.15 per share by the second fiscal quarter of 2005. Unbeknownst
to investors, however, defendants' statements were materially false
and misleading because defendants knew, or recklessly disregarded,
that recent trends in the home video market indicated a slow down
in the sales of new home video releases and therefore, increased
returns of unsold copies from retailers that would negatively
impact the Company's earnings. In fact, according to an article
published in The Wall Street Journal, a new DVD release would
realize approximately 50-70% of its total sales in its first week,
compared to 33% and a steady increase in sales thereafter five
years ago. Defendants' response to the change in sales trends of
home videos was to flood the market with units of The Incredibles
home video, far in excess of what retailers could sell, prior to
and during the first weeks of release to maximize sales. Defendants
knew or recklessly disregarded, however, that this strategy would
result in a disproportionate number of early sales followed by a
disproportionate number of product returns, but failed to make the
necessary adjustments to account therefor. As a result of
defendants' wrongful and illegal scheme, the price of Pixar
securities became artificially inflated during the Class Period and
enabled Company insiders, including defendants Bax and Catmull, to
sell hundreds of thousands of shares of their personally held Pixar
stock for over $27.1 million in proceeds. On June 30, 2005, the
last day of the Class Period, the Company issued a press release
lowering its second quarter 2005 earnings guidance to $0.10 per
diluted share from $0.15, the difference of approximately $6
million in net income, as a result of disappointing sales of The
Incredibles home video units and an increase in the Company's
reserves for returns. As a result of this news, the price of Pixar
common stock fell more than $9.00 per share to $43.00 from the
prior day's close of almost $52.00 per share, representing a
one-day decline of over 17% on very heavy trading volume. On August
26, 2005, defendants announced that the SEC had commenced an
investigation of Pixar in connection with reported sales of The
Incredibles DVD and that the SEC had "requested information leading
up to the filmmaker's report earlier this month of lower
second-quarter earnings." In reaction to this news, Pixar shares
fell an additional $1.01 per share to close at below $42.00.
Milberg Weiss Bershad & Schulman LLP
(http://www.milbergweiss.com) is a firm with over 100 lawyers with
offices in New York City, Los Angeles, Boca Raton, Delaware, and
Washington D.C. and 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 others for nearly 40 years.
Please contact the Milberg Weiss website for more information about
the firm. If you wish to discuss this action with us, or have any
questions concerning this notice or your rights and interests with
regard to the case, please contact the following attorneys: -0- *T
Steven G. Schulman Peter E. Seidman Andrei V. Rado One Pennsylvania
Plaza, 49th fl. New York, NY 10119-0165 Phone number: (800)
320-5081 Email: sfeerick@milbergweiss.com Website:
http://www.milbergweiss.com *T
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