Global Eagle Entertainment, Inc.
Robbins Arroyo LLP: Global Eagle Entertainment, Inc. (ENT) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Global Eagle Entertainment, Inc. (NYSE: ENT) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of Global Eagle securities between July 27, 2016 and February 17, 2017, for alleged violations of the Securities Exchange Act of 1934 by Global Eagle’s officers and directors. Global Eagle provides content, connectivity, and digital media solutions for travel industry worldwide.
Global Eagle Accused of Unjustifiably Touting Its Competitive Advantage
According to the complaint, on July 27, 2016, Global Eagle announced that it had completed its acquisition of communication services provider Emergency Markets Communications (“EMC”). Global Eagle subsequently touted in press releases and in filings with the U.S. Securities and Exchange Commission (“SEC”) the success of the EMC acquisition, stating that it positioned Global Eagle “as a leader in supplying satellite-based connectivity and media to the rapidly growing global mobility market” and that “the integration process is well underway.” Global Eagle further highlighted the benefits and financial implications of the EMC acquisition, stating that the company’s revenue increased 33.4% compared to the prior year period. However, the complaint alleges that Global Eagle officials failed to disclose that the company was unable to timely and properly account for the EMC acquisition and consequently, the company lacked effective internal controls over financial reporting.
On February 21, 2017, Global Eagle announced that its Chief Executive Officer, David M. Davis, and Chief Financial Officer (“CFO”), Thomas E. Severson Jr., had resigned from their positions. The company further revealed that it expected to file its Annual Report for fiscal year 2016 after the March 16, 2017 SEC deadline, citing the company’s “increased size and complexity” after its acquisition of EMC, its need to transition the finance department in the wake of the CFO’s departure, and its need to complete additional financial-closing procedures associated with the company’s material weaknesses in internal control over financial reporting. On this news, Global Eagle’s stock fell $1.74 per share, or 27.97%, to close at $4.48 per share on February 21, 2017.
Global Eagle Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003,or you can complete the form below and we will contact you directly.