A class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons who purchased or otherwise acquired the common stock of Netlist, Inc. ("Netlist" or the "Company") (NASDAQ: NLST) in connection with its November 30, 2006 Initial Public Offering ("IPO") through April 16, 2007, inclusive (the "Class Period").
The Complaint charges Netlist and certain of the Company's executive officers and directors with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and materially false and misleading statements concerning the Company's business, operations and prospects caused Netlist's stock price to become artificially inflated, inflicting damages on investors. Netlist is a designer and manufacturer of high-performance memory subsystems, which are sold to original equipment manufacturers in the server, high-performance computing, and communications markets. The Complaint alleges that defendants failed to disclose, among other things, that: (1) the Company was experiencing the effects of an over-supplied memory chip market, and demand for the Company's products had deteriorated substantially; (2) due to excessive inventory levels, the Company's two largest customers would be forced to slash their product orders to return to acceptable levels; (3) the Company's profit margins were quickly eroding in the memory chip market; (4) the Company lacked adequate internal controls; and (5) as a result of the foregoing, among other things, the Company's Registration Statement was false and misleading at all relevant times.
On April 16, 2007, Netlist shocked investors when it reported its first quarter 2007 preliminary financial results, which disclosed for the first time that its operating results would be dramatically lower than investors were led to believe, primarily due to an oversupplied dynamic random access memory market, which in turn affected the Company's product pricing and gross margins. Additionally, the Company revealed that it had experienced a lower than expected demand for high-end products from its largest customers, due to excess inventory which had also significantly reduced demand for the Company's products. As a result of this news, shares of the Company's stock declined more than 28 percent, or $1.68 per share, to close on April 17, 2007, at $4.29 per share, on unusually heavy trading volume.
If you are a member of the class, you may, no later than July 27, 2007, request that the Court appoint you as lead plaintiff of the class. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs can participate in important decisions which could affect the recovery for class members.
If you wish to discuss this action, or have any questions concerning this notice or your rights, please contact us, toll free, at (888) 529-4787 or by email at info.newcases@kmslaw.com.
Kirby McInerney & Squire, LLP has specialized in complex litigation, including securities class actions, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and the firm's achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or about the role of the lead plaintiffs in a securities class action can be obtained through Kirby McInerney & Squire, LLP's website at http://www.kmslaw.com/.
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