Shareholders sue Gateway
Shareholders filed a lawsuit against Gateway Friday alleging the company defrauded them by claiming it was "undervalued".
The lawsuit was filed on behalf of shareholders who bought Gateway stock between 13 October 2000 and 29 November 2000 and alleges that Gateway did not tell investors that the company's growth was slowing. "In fact, the Company knew that its growth was slowing and that it had no chance to meet Wall Street earnings estimates," the suit claims.
Gateway issued a profit warning 29 November that erased billions of dollars from its share price. Other PC makers and high-tech companies also issued warnings around the same time as a result of generally slowing growth in the US economy. Sales problems have hit such market leaders as Intel and Compaq.
The lawsuit was filed in United States District Court for the Southern District of California by the law firm of Schiffrin & Barroway. Shareholders can join until 5 February 2001.
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