Best Buy Sued Stock Plunge
EDEN PRAIRIE, Minn. (AP) _ Two shareholders have sued Best Buy Co. following a recent stock price plunge, saying the electronics retailer misled investors about growth prospects.
The lawsuit filed Tuesday in U.S. District Court in St. Paul alleges misleading information artificially inflated Best Buy’s stock price.
The company’s price dropped $11.25 a share Dec. 1, closing at $33, after Chief Financial Officer Allen Lenzmeier reported the company expects profits of 40 to 43 cents a share for the third fiscal quarter that ended Nov. 26. Estimates among Wall Street analysts were 45 to 47 cents a share.
Best Buy spokeswoman Susan Hoff said the suit lacks merit.
The suit, filed by plaintiffs Indradat Jagnandan and W. H. Mayer on behalf of Beatrice Birnbaum, alleges that Chief Executive Officer Richard Schulze and Lenzmeier this fall continued promoting the company’s growth prospects even though there were signs that momentum was slowing.
Best Buy stock was unchanged at $31.37 1/2 in late trading on the New York Stock Exchange Wednesday.