SOURCE: Stull, Stull & Brody

July 19, 2005 17:37 ET

Stull, Stull & Brody Announces Class Action Against Majesco Entertainment Company

NEW YORK, NY -- (MARKET WIRE) -- July 19, 2005 -- Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of New Jersey, on behalf of all persons who purchased the publicly traded securities of Majesco Entertainment Company ("Majesco") (NASDAQ: COOL) between December 8, 2004 and July 12, 2005, inclusive (the "Class Period").

The complaint alleges that Majesco violated federal securities laws by issuing misleading public statements. Specifically, defendants represented that the Company's revenue and income would continue to grow over its 2004 and first half of 2005 results in its fiscal year 2005, even as Majesco increased its investment in product development and marketing. Unbeknownst to investors, Majesco's strong reported growth resulted from the Company having inundated its retailers with product in excess of demand. As defendants knew, Majesco's strong growth was unsustainable because retailers would either return the unsold products or would sell off excess inventory instead of ordering new products. In addition, two of Majesco's new video game titles flopped. Defendants engaged in the alleged wrongdoing to inflate the stock price in Majesco's planned secondary offering.

On July 12, 2005, Majesco issued a press release announcing a dramatic reduction in its expected 2005 results. Rather than earning $16-$18 million in 2005, Majesco would show a loss of $16-$19 million on revenues of $120 to $125 million. Majesco attributed this reversal to: substantially weaker demand for its products; a glut of Majesco products sitting on retailers' shelves; and weak reorders. Majesco also announced the resignation of its Chairman and Chief Executive Officer. On this news, Majesco shares plummeted, falling 48%, from $6.89 per share on July 12, 2005 to $3.56 per share on July 13, 2005.

If you acquired Majesco securities between December 8, 2004 and July 12, 2005, you may, no later than September 16, 2005, request the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 30 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody maintains offices in both New York and Los Angeles.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017. You can also visit our website at www.ssbny.com.

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