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Shareholders sue DreamWorks over DVD - Reuters 06/02/05

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  • Shareholders sue DreamWorks over DVD - Reuters 06/02/05

    Article from Reuters - June 2, 2005
    Shareholders sue DreamWorks over DVD

    LOS ANGELES (Reuters) - DreamWorks Animation SKG Inc (DWA.N: Quote, Profile, Research) on Thursday was hit with its first shareholder lawsuit since going public -- a proposed class action accusing company officers of misrepresenting DVD sales for "Shrek 2."
    The lawsuit filed in Los Angeles federal court says DreamWorks Chief Executive Jeffrey Katzenberg and board Chairman Roger Enrico failed to disclose in the first quarter that sales of "Shrek 2" DVDs were declining far more than expected.

    The suit says DreamWorks continued to ship the title "far in excess of the actual demand" and hid the fact that retailers were returning "massive amounts" of unsold DVDs.

    DreamWorks spokesman Bob Feldman said the company had not seen the lawsuit but called the claims "baseless."
    "Shrek 2" has logged sales of 35 million to date.

    Shares of DreamWorks Animation dropped another 7 percent on Tuesday and were trading at $29.74 on Thursday, after last weekend's theatrical debut of "Madagascar" failed to meet analysts' expectations.
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