SAN FRANCISCO, Oct. 18, 2010 (GLOBE NEWSWIRE) -- Hagens Berman Sobol Shapiro LLP (HBSS) reminds investors that they must move to be a lead plaintiff in a lawsuit against TeleNav Inc. ("TeleNav") (Nasdaq:TNAV) and certain of its Officers by November 1, 2010.
If you purchased stock in TeleNav before July 30, 2010, and you wish to serve as lead plaintiff, you must move the Court by November 1, 2010. You may discuss such participation or your rights, by contacting Hagens Berman partner Reed R. Kathrein at 510.725.3000, or at TNAV@hbsslaw.com. Details of the case and investigation can be found at http://www.hbsslaw.com/cases-and-investigations/telenav and http://www.hbsslaw.com/newsroom/?nid=1925.
Hagens Berman advises investors seeking representation to move to be a lead plaintiff to consider the investigation of counsel in making their decision, as well as counsel's reputation, skills and resources.
The lawsuit, currently under investigation, alleges that TeleNav filed a false and misleading registration statement in connection with the company's May 13 initial public offering. The registration statement showed that 55 percent of TeleNav's business came from wireless carrier Sprint Nextel Corp. and that the contract with Sprint was not due to expire until December 2011. Following the IPO, TeleNav's stock traded as high as $9 per share until July 29, when the company dropped the "Sprint Bombshell."
Less than three months after its IPO, TeleNav revealed that it was already in "active negotiations" with Sprint to amend material terms of its contract with the wireless carrier. On July 30, TeleNav's stock price plunged, eventually closing at $5.44 per share, a one-day decline of 39 percent. Over the next several weeks, the share price continued to decline as stock analysts from JP Morgan and Deutsche Bank Securities downgraded the stock due to the potential revenue loss associated with the evolving contract with Sprint.
On September 20, 2010, TeleNav announced it had reached a new agreement with Sprint that would in fact lead to lower revenues, and that Sprint-branded navigation services will transition to TeleNav-branded navigation over time. On October 7, 2010, TeleNav stock traded as low as $5.14 per share.
According to the lawsuit, TeleNav failed to disclose that it was, or would shortly be, renegotiating material terms to its contract with Sprint and that the renegotiated contract would likely result in significant revenue declines at TeleNav. Key allegations include that TeleNav knew at the time of the offering that negotiations would commence shortly with Sprint over renewal of their contract; that TeleNav executives had already started preliminary discussions with Sprint; and that TeleNav executives knew, at the time of the IPO, that a "successful renegotiation" of the Sprint contract would lead to a "reduction of revenue" from the carrier.
HBSS's in-house investigation indicates TeleNav knew prior to its IPO that Sprint complained about devoting resources to the TeleNav navigation product and would not pre-load it onto Sprint's Android phones. HBSS' investigation also indicates that TeleNav was told Sprint would pre-load Google's free service instead, and TeleNav could sell their service through their new Sprint Zone application. With that news, TeleNav had already begun development efforts to rebrand Sprint Nav to a TeleNav brand.
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