The Little Rock, Ark.-based law firm of Cauley Geller Bowman & Coates has filed a class action on behalf of all investors who purchased Amazon.com Inc. stock between Feb. 2, 2000 and March 9, 2001.
The complaint alleges that in February 2000, Amazon announced favorable Q4 1999 results and partnerships it said would represent $500 million in revenue over the next five years. On Feb. 16, 2000, Amazon completed an offering of Euro 690 million, the law firm says. The offering provided that Amazon would receive $663 million in net proceeds. However, the firm alleges that the defendants concealed from the public that the payments from the partnerships would be in stock, not cash, and the actual receipt of this money was uncertain. Furthermore, on March 9, 2001, it was revealed that Amazon`s CEO was being investigated for selling 800,000 shares of the company`s stock prior to a negative report by an analyst assigned to cover Amazon. The suit contends that that news caused a further decline in Amazon`s stock price which is now 86% off its high from February 2000 to March 2001.
Amazon says the suit is without merit. "We are confident that our financial and accounting disclosures, including those related to the Amazon Commerce Network, have been correct and appropriate," the company said in a prepared statement. "Based on the allegations we have reviewed so far, it is clear that these lawsuits are without merit, and we expect that they will be dismissed by the court." Amazon would not comment further.