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Investigations  /  02.08.2011

Coinstar, Inc.

Robbins Umeda LLP Announces an Investigation of Coinstar, Inc.

Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Coinstar, Inc. (“Coinstar”) (NASDAQGS: CSTR).  Coinstar owns and operates self-service coin-counting machines and installs and operates RedBox kiosks that dispense DVDs.  The company was founded in 1991 and is headquartered in Bellevue, Washington.

Robbins Umeda LLP’s investigation concerns whether Coinstar’s officers and directors caused the company to issue materially false and misleading statements regarding the company’s revenue and earnings guidance for 2010 and 2011.  Specifically, the investigation concerns whether these fiduciaries misled investors about the growth and profitability of its RedBox DVD kiosk business, despite changes in the DVD industry which required vendors to wait twenty-eight days before obtaining movie titles from the movie studios.

On October 28, 2010, the officers and directors at Coinstar issued positive revenue and earnings guidance for the fourth quarter of 2010, including consolidated revenue projections of $415-$440 million and per share earnings between $0.79 and $0.85 per share.  As a result of these projections, the company’s value increased almost 25% over the prior day’s closing.  However, on January 13, 2011, Coinstar announced earnings for the fourth quarter and full year of 2010, in which investors learned that the company would earn as little as $0.65 per share for the quarter on revenues of $391 million, well below analysts’ expectations and previous guidance sponsored and endorsed by the company.  Upon this news, Coinstar’s value dropped more than 30%.

If you own stock in Coinstar and would like more information about your rights as a shareholder, please contact attorney Gregory E. Del Gaizo at 800-350-6003 or by e-mail at info@robbinsarroyo.com.

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