EA announced last week that it expects its current quarter's revenues to be well below (maybe as much as $200 million below) earlier estimates. EA's share price immediately dropped more than $10, and other game companies also saw their share prices decline. EA attributes these losses to the unexpected console hardware shortages that occurred in late 2004.
What does this have to do with law, you ask? Well, a US law firm has since filed a class action lawsuit alleging that EA issued false or misleading public statements about its expected financial performance. Whether this class action suit will be proceed remains to be seen, but it reminds us that financial troubles and legal troubles often go hand in hand.