NEW YORK, Oct. 14, 2016 (GLOBE NEWSWIRE) -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC reminds investors that a class action lawsuit has been filed against MGT Capital Investments, Inc. (“MGT” or the "Company") (NYSE: MGT ) and certain of its officers. The class action is on behalf of a class consisting of all persons or entities who purchased MGT securities between May 9, 2016 and September 20, 2016, inclusive (the “Class Period”).
This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
MGT acquires, advances, and monetizes assets in the online, mobile, and casino gaming space. The Company operates through two segments, Gaming and Intellectual Property. The Company is currently in the process of acquiring D-Vasive, a provider of leading edge anti-spy software, and Demonsaw, a provider of a secure and anonymous file sharing software platform.
On May 9, 2016, MGT announced that it had entered into an agreement to acquire certain assets and technologies from D-Vasive Inc. (“D-Vasive”), a provider of anti-spy software (the “D-Vasive Transaction”). With this acquisition, MGT announced the planned position of Defendant John McAfee (“McAfee”) as MGT’s Executive Chairman and Chief Executive Officer (“CEO”), and the planned corporate name change to John McAfee Global Technologies, Inc. MGT notified investors that “[m]ajor terms of the deal include the payment to D-Vasive Inc. stockholders of 23.8 million restricted shares of MGT stock and $300,000 in cash. The proposed share issuance is expected to amount to roughly 47% of the Company on a pro-forma diluted basis at closing.”
Then, on May 26, 2016, the Company publicized that it had entered into an agreement to acquire certain technology and assets from Demonsaw LLC (“Demonsaw”), which MGT said is “a provider of a secure and anonymous file sharing software platform.” MGT notified investors that “[m]ajor terms of the deal include the payment to Demonsaw LLC members of 20.0 million restricted shares of MGT common stock. The proposed share issuance is expected to amount to approximately 28% of the Company’s common stock on a pro-forma fully diluted basis at closing, inclusive of shares of common stock to be issued in connection with the Company’s previously announced transaction with D-Vasive, Inc.” MGT and D-Vasive would then arrange for D-Vasive to purchase Demonsaw in advance of the D-Vasive Transaction, “in order to simplify these transactions, and meet certain customary tax issues,” so that MGT would acquire Demonsaw’s assets as well as D-Vasive’s via the D-Vasive Transaction.
On September 9, 2016, at MGT’s 2016 Annual Meeting of Stockholders, the Company stated its issuance of a total of 43.8 million shares of common stock in connection with the D-Vasive Transaction had been approved by its shareholders.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose: (1) the NYSE was unlikely to approve the listing of 43.8 million additional shares that MGT was required to issue in connection with the acquisitions of D-Vasive and Demonsaw; and (2) consequently, MGT’s public statements were materially false and misleading at all relevant times.
On September 19, 2016, pre-market, MGT announced that on September 15, 2016, it received a subpoena from the Securities and Exchange Commission ("SEC"). The Company stated that it does not believe it will be the subject of any enforcement proceedings and is fully cooperating with the SEC's requests. Following this news, MGT stock dropped $0.74 per share, or 22.7%, to close at $2.52 on September 19, 2016.
Then on September 20, 2016, MGT announced that the NYSE had informed MGT on September 19, 2016 that it would “not approve the listing on the Exchange of the 43.8 million shares that the Company is required to issue in order to complete the closing of the D-Vasive [sic] merger,” and that “[t]he Company and John McAfee remain committed to closing the transaction and are exploring alternatives.”
Then on September 20, 2016, MGT announced that the NYSE would not approve the listing of 43.8 million shares.
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint you can visit the firm’s site: http://www.bgandg.com/mgt or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484 or via email info@bgandg.com . Those who inquire by e-mail are encouraged to include their mailing address and telephone number. If you suffered a loss in MGT you have until November 21, 2016 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm’s expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact: Bronstein, Gewirtz & Grossman, LLC Peretz Bronstein or Yael Hurwitz 212-697-6484 | info@bgandg.com
