Shareholders sue Majesco

THE SUMMER of legal love in the IT world has spread its tentacles to the gaming industry today with publisher Majesco having four different suits launched against it, three in the same day, and with more expected to follow. The really interesting thing about this one is that it is the companies own shareholders who are filing suit.

The company's fortunes over the last couple of months have been mixed. Just before E3 in May they released Psychonauts to rave reviews and it had bought licences such as Taxi Driver and Aeon Flux. Its stock price was at $9 a share just before the show and after it they posted excellent expected results of between $175 to $185 million in revenue and a profit of between $16 to $18 million.

However, a month after E3 the boss quit as expected earnings dropped to $120 to $125 million in revenue and the profit dropped to an operating loss of $16 to $19 million. The stock price has hit rock bottom at $3.25 a share and now the companies shareholders are filing suit against the company, claiming it mislead them with short term rosy figures that they knew they would have to revise downwards to current levels at a later date.

Slow sales of Psychonauts and their other big launch Advent Rising have contributed and now the company is in a lot of hot water with the four class-action suits already filed and more expected to follow. At the very least shareholders suing company's makes a change from the usual AMD sues Intel and err, AMD sues Intel again stories we've been hearing…µ