| Company: | Best Buy Co Inc |
| Ticker Symbol: | BBY |
| Class Period: | Sep-14-10 to Dec-13-10 |
| Date Filed: | Mar-17-11 |
| Lead Plaintiff Deadline: | May-16-11 |
| Court: | District of Minnesota |
| Allegations: | |
The Complaint charges Best Buy and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Best Buy is a multinational retailer of technology and entertainment products and services. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that demand for the Company's electronic products was declining and/or weak; (2) that as a result, the Company would be unable to achieve its fiscal 2011 sales, revenue and earnings forecasts; (3) that the Company's fiscal 2011 earnings forecast could not be achieved without a reduction of SG&A expenses, significant earnings management, and share repurchases; (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the foregoing, the Company's statements about its financial well-being and prospects, including its annual earnings per share ("EPS") guidance of $3.70, lacked any reasonable basis when made.
Prior to and throughout the Class Period, Best Buy touted the strong demand for its consumer electronic products and forecasted fiscal year 2011 EPS of up to $3.70. Further, the Company maintained that its 2011 earnings forecast was independent of the impact of the Company's share repurchases. As a result of these positive statements, Best Buy stock closed as high as $44.81 per share during the Class Period.
However, on December 14, 2010, Best Buy astounded investors when it announced its third quarter 2011 results, and disclosed that product sales were declining, and had been declining since June 2010. The Company stated that "newer technologies" had "been slower to take hold," that the notebook market was weaker than expected, that the gaming sector "lagged expectations," and that the Company's top-line growth assumptions "turned out to be too aggressive." Further, the Company drastically lowered its 2011 earnings forecast to a range of between $3.20 to $3.40 per share from its previous range of between $3.55 to $3.70 per share. Moreover, Best Buy disclosed that it had repurchased 11 million shares of Company stock during the quarter (which, when added to prior quarters' share repurchases, means that in the first three quarters of fiscal 2011 it had repurchased over 31 million shares of Company stock). This repurchasing activity would have a $0.12 per share positive impact on Best Buy's lowered fiscal 2011 EPS forecast, indicating that, but for these repurchases, Best Buy would expect lowered fiscal 2011 EPS of as low as $3.08 per share. Upon the release of this news, shares of the Company's stock fell $6.18 per share, or 14.82 percent, to close on December 14, 2010 at $35.52 per share, on unusually heavy trading volume. Best Buy's stock continued to decline the following day, falling an additional $1.02 per share, to close on December 15, 2010 at $34.50 per share.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
