The promised lawsuit by law firm Robins Geller against Electronic Arts on behalf of investors who lost money following the launch of Battlefield 4, which coincided with a severe drop in the company’s stock price, is going ahead as planned.
The complaint charges Electronic Arts and a number of its officers and directors with violations of the Securities Exchange Act of 1934. The unnamed Plaintiff/s are seeking to recover damages on behalf of all purchasers of Electronic Arts common stock during the Class Period.
The lawsuit covers money lost by investors between the period of 24 July 2013 and 4 December 2013, which is called the “class period.”
According to the lawsuit, Electronic Arts allegedly issued “materially false” and “misleading” statements highlighting the purported strength of the company’s rollout of Battlefield 4 this fall. Electronic Arts then issued strong fiscal 2014 financial guidance for the company, and increased that guidance on October 29.
Thanks to these positive statements, stock steadily climbed to as much as $28.13 per share, allowing senior executives to sell their stock at artificially inflated prices.
Once the game launched on PS4 on 15 November 2013, the stock value began to decline due to reports of “multiple glitches and significant crashes” related to the PlayStation 4 version. Stock value fell again on December 4 when Electronic Arts told the gaming community that work on DLC and more content for Battlefield 4 would cease until the problems could be fixed.
“Ultimately,” notes Robins Geller in their letter to investors, “shares declined more than 28 percent in value since the reported high in October.”