Westwood Slaps TransMedia With $42M Lawsuit
July 28, 2008 at 8:07 AM (PT)
TRANSMEDIA GROUP said TODAY it received from WESTWOOD ONE, INC. attorneys a summons and complaint bringing a lawsuit against the PR firm for $42 million over a news release that WESTWOOD contends punished its stock price in APRIL.
"Everyone knows the power of publicity, but we think WESTWOOD is giving us far too much credit," said TRANSMEDIA Founder/Chairman THOMAS J. MADDEN. "We doubt a single press release could have had such an impact, nevertheless it's flattering to be credited with so much power. It's like GOLIATH complimenting DAVID."
According to WESTWOOD's complaint, the press release contained false and inaccurate information that caused "immediate injury to the market price of WESTWOOD's stock." It hit the newswires at 10:58a. "Almost immediately," the summons said, "WESTWOOD's stock began plummeting from $2.37 a share to a closing selling price of $1.90 ... a 19.8% drop that resulted in a $42 million loss of market capitalization. WESTWOOD topped the WALL STREET JOURNAL's list of 'Biggest Percentage Price Decliners' on the NYSE that day."
"There's one thing wrong with their analysis," MADDEN said. It neglects to say the release merely quoted public record in the form of a lawsuit filed in Circuit Court for the 17th Judicial Circuit in BROWARD COUNTY, FL. The case has since been moved to Federal Court.
WESTWOOD ONE had "no comment" when contacted by ALL ACCESS.