Greenfield to Defend Share Price Inflation Lawsuit

Internet survey firm Greenfield Online says it will vigorously defend itself against accusations made this week by a shareholder. The charge says the agency made 'false and misleading statements' about its business, operations and future prospects, leading to artificially inflated share prices in 2005.

The complaint, against Finance Chief Robert Bies and former CEO Dean Wiltse, has been made by investor the Plumbers and Pipefitters Local Union No.650 Pension Annuity Trust Fund. The Fund says that statements made between February and September 2005 deceived investors and pushed up the company's share price. It claims to have suffered 'real economic loss' as a result of purchasing shares during the period.

In May 2005, Wiltse reported that bid activity was at the highest level in the company's history, adding: 'We believe our base business, combined with our acquisitions of Ciao AG, Rapidata and goZing make Greenfield Online the largest independent survey solutions provider - from a revenue perspective - in a high growth market' (www.mrweb.com/drno/news4062.htm ). Share prices climbed to $20.19.

However, the complainant says that during this time, the company failed to reveal that it was experiencing several adverse trends in its core business which were negatively impacting its revenues and earnings and which caused it to miss its internal performance and expectations.

The complainant also charges Greenfield with overvaluing Ciao by tens of millions of dollars and says that it lacked a reasonable basis for its positive statements concerning the company's earnings, prospects and financial results. The organisation also alleges that Greenfield failed to disclose that Ciao was not performing according to expectations.

In August 2005, Greenfield admitted in a press release that its US bid volume had been flat in the second quarter, and its full year revenue projection was revised down to between $95 million and $99 million. Shares in the company immediately fell 27% to $8.94. By the end of September Greenfield announced it had again lowered its outlook for the third quarter 2005 and fiscal year, and this prompted shares to fall another 20% to close at $5.44. At this point Wiltse left the firm and was replaced by Albert Angrisani who has since restructured, leading to signs of recovery.

The Plaintiff is seeking to recover damages on behalf of all those who purchased Greenfield Online's common stock during the period. Greenfield today said in a press release it believes that the allegations in the lawsuit are without merit, and it intends to vigorously defend itself against all allegations.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

• Ciao Ag
• All news