BALA CYNWYD, Pa., Jan. 25, 2002 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
A securities class action lawsuit pending in the U.S. District Court for the Eastern District of Texas, Texarkana Division (502-CV-003) claims that Rent-A-Center, Inc. ("Rent-A-Center" or the "Company") (Nasdaq:RCII) J. Ernest Talley (Chairman and CEO until October 8, 2001), Mitchell E. Fadel (President and Director), Robert D. Davis (CFO and Treasurer) and Mark E. Speese (Director until October 8, 2001, thereafter Chairman and CEO) issued false and misleading statements concerning its business and financial condition.
Plaintiff seeks damages for violations of the Securities Exchange Act of 1934 on behalf of all investors who bought Rent-A-Center, Inc. securities between April 25, 2001 and October 8, 2001 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of Rent-A-Center, Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our Website at www.sbclasslaw.com.
The complaint alleges that the Texas-based Rent-A-Center, Inc., on April 25, 2001, issued a press release announcing record results for the first quarter of 2001 and highlighting the Company's resilience in a weakening economy. The representations in the press release were, according to the allegations of the complaint, materially false and misleading because the Company did not disclose that its expenses were rising dramatically as Rent-A-Center attempted to combat weakening demand with deep discounts and promotions. While in possession of this adverse non-public information, Rent-A-Center completed a secondary offering of 3,200,000 shares of its common stock at $42.50 per share, on May 25, 2001. Defendant Talley sold 1,700,000 Rent-A-Center shares in the secondary offering, grossing over $72 million, and defendant Speese sold 500,000 shares, grossing over $21 million. Then, on May 31, 2001, defendant Talley sold an additional 1,955,000 shares of Rent-A-Center common stock at $40.38 per share, grossing over $78 million.
Subsequently, on October 8, 2001, only five months after the secondary offering, Rent-A-Center issued a press release announcing that earnings for the third and fourth quarter of 2001 would be significantly less than the Company's previous guidance to the market, due to rising expenses. In response to this announcement, Rent-A-Center's stock price dropped by 19% in one day on heavy trading volume.
If you purchased Rent-A-Center, Inc. securities during the period of April 25, 2001 through October 8, 2001, you may be a member of the class and have until March 5, 2002 to move the court to become a lead plaintiff. In order to serve as lead plaintiff, however, you must meet certain legal requirements. To be a member of the class, however, you do not need to take any action at this time. Should you decide to seek appointment as a lead plaintiff, you may retain Schiffrin & Barroway, or retain counsel of your choice.
To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our Website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca