January 27, 2012 9:35am PT by Eriq Gardner
Cablevision Hit With Investor Class Action Lawsuit
Cablevision is facing a new investor class action lawsuit that alleges the company issued materially false and misleading statements that inflated its share price.
The lawsuit was filed in New York federal court on Thursday and targets Cablevision's period between Feb. 16, 2011 and Oct. 28, 2011, when the company's stock price fell from around $38 a share to under $15.
The investor plaintiffs blame the sharp drop on alleged failures to disclose certain facts about its business, including that Cablevision was experiencing higher retention and advertising costs and that the company was losing more video customers than expected.
The lawsuit, being brought by the law firm of Robbins Geller and based on alleged violations of the Securities Exchange Act of 1934, indicates that investors were pleased by substantial gains in reported net income from 2008 and 2010, but experienced shock after Cablevision reported at the end of the third quarter that its net income had fallen from $68.44 million to $39.22 million.
"We are reviewing the complaint, and will be defending against it vigorously," says a Cablevision spokesperson.