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DreamWorks Animation Hit with Class-Action Lawsuit

by on July 22, 2005

DreamWorks Animation SKG and certain directors have been named in a class action lawsuit filed on behalf of investors by Milberg Weiss Bershad & Schulman, the law firm said yesterday.

The complaint alleges that the company made materially false and misleading statements with respect to sales of Shrek 2 home video units.

Late last year, DreamWorks reported and forecast continuing strong sales of Shrek 2 in the DVD market. The company was later forced to revise both those forecasts and its corresponding earnings projections downward. DreamWorks’ stock price has since fallen by a third. The Milberg Weiss suit alleges that the company knew that the high sales could not be sustained, and that company insiders profited from the false statements by selling $140 million worth of stock.

[Source: Business Wire]

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