Class action suit claims Millennial Media misled investors

Mississippi’s state pension system has filed a class action suit against Millennial Media alleging executives at the Canton firm held back information they should have told investors, The Baltimore Sun reports.

The suit, filed last week in federal court in New York, is the latest in a long line of bad news this year for the mobile advertising company.

CFO Michael Avon left Millennial in June and shares, as of Monday, had lost more than 90 percent of their value from the company’s 2012 initial public offering. Avon’s resignation is one of the events cited by the suit, according to the Sun report.

The law firms allege the company withheld information on the development and functionality of key technology, the benefits of some corporate acquisitions and the outlook for the company’s future performance. But when that information came to light, Millennial’s stock price plummeted. After a May conference call that revealed mounting losses and the departure of the company’s chief financial officer, shares fell 40 percent in a day.

“The true state of Millennial Media’s technology, acquisitions, and outlook was revealed through a series of disclosures that included revelations of disappointing financial results and guidance, additional corporate acquisitions, and the resignation of its Chief Financial Officer, Michael B. Avon to ‘pursue other career interests,'” the law firms Labaton Sucharow LLP and Bernstein Litowitz Berger & Grossmann LLP said in a statement.

Millennial officials declined comment on the pending litigation.
Read the full story in the Baltimore Sun