Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Eastern District of Missouri on behalf of all purchasers of the common stock of CPI Corp. (“CPI” or the “Company”) (OTC: CPIC.PK) between April 20, 2010 and December 21, 2011 (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 (the “Complaint”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Scott J. Farrell, Esquire of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to email@example.com, or at: http://www.rigrodskylong.com/investigatgions/cpi-corp-cpic.
CPI is a holding company that engages in the sale of professional portrait photography, and related services, through its wholly owned subsidiaries. The Complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding CPI’s business and financial results. Specifically, the Complaint alleges that defendants misrepresented that the Company’s growth initiatives were working and that it was well positioned for growth. In fact, CPI’s business was performing much worse than defendants acknowledged; CPI’s initiatives to grow the business were not as successful as represented by defendants; the Company’s stock buy-back was intended to falsely project confidence in the Company’s prospects; and CPI’s cash flows would continue to deteriorate because of poor revenue growth and CPI’s capital structure was not as strong as defendants represented.
On December 22, 2011, the Company announced its financial results for quarter ended November 12, 2011, reporting a net loss of ($7.25) million, or ($1.03) diluted earnings per share for the quarter, and that net sales declined to $95.0 million, or 11%, due in large part to declining comparable store sales. As a consequence, CPI failed its leverage ratio test under its revolving credit facility, and was required to amend its credit agreement and cease paying its dividend. On this news, CPI stock declined $3.30 per share, to a close of $1.98 per share on December 22, 2011, a drop of almost 63%.
If you wish to serve as lead plaintiff, you must move the Court no later than March 13, 2012. A lead plaintiff is a representative party acting 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. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.
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