The bad news just keeps on coming for DICE and EA. Business Wire reports that shareholders are filing a class action suit over the poor sales performance and decline in stock price due to the issues with Battlefield 4.
The complaint charges Electronic Arts and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Electronic Arts develops, markets, publishes and distributes video game software content and services that can be played by consumers on a variety of Internet-based electronic devices for video game consoles, personal computers, mobile phones, tablets and electronic readers.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements highlighting the purported strength of the Company’s rollout of version 4 of its all-important Battlefield video game series, which had provided approximately 11% of its revenues in fiscal 2012. Based on the purported strength of the Battlefield 4 rollout then underway, defendants issued strong fiscal 2014 financial guidance for the Company and actually increased that guidance on October 29, 2013. The price of Electronic Arts’ stock steadily climbed on these statements, reaching a Class Period high of $28.13 per share by August 23, 2013 and allowing certain of Electronic Arts’ senior executives to sell their Electronic Arts stock at artificially inflated prices.
It’s bad when your players are up in arms over the game they already purchased. It’s way worse when your shareholders are filing lawsuits against you. That’s bad news for executives.
