CASES
The St. Joe Company
Class Period: Feb 19, 2008 to Oct 12, 2010
Lead Plaintiff Deadline: Jan 3, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against The St. Joe Company (JOE) ("St. Joe" or the "Company") on behalf of all securities purchasers from February 19, 2008 through October 12, 2010, inclusive ("Class Period"), in the United States District Court for the Northern District of Florida.
The complaint alleges that St. Joe failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) as the Florida real estate market was in decline, St. Joe was failing to take adequate and required impairments and accounting write-downs on many of its Florida based property developments; (2) as a result, St. Joe's financial statements materially overvalued the Company's Florida based property developments; (3) the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (4) the Company lacked adequate internal and financial controls; and (5) as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times.
On October 13, 2010, St. Joe's investors were shocked as Greenlight Capital's David Einhorn detailed at the Value Investing Congress how St. Joe needed to take "substantial impairments" and accounting writedowns on many of its properties, and that further building by the Company "will drive the stock price to zero." Mr. Einhorn's presentation, entitled "Field of Schemes: If You Build It, They Won't Come," noted that St. Joe's "development plans have fallen flat, leaving it with 'ghost towns' and inevitable writedowns." For example, Mr. Einhorn said he would "generously" place a value of $17.8 million on the remaining residential development at St. Joe's Windmark Beach property while the company is carrying the property at $164.5 million on its balance sheet. Mr. Einhorn also stated that the Company "was 'stuck' after making an aggressive bet on beachfront developments that have gone nowhere, and that it was overvaluing the real estate holdings on its books."
On this news, shares of the Company's stock fell $2.38 per share, or 9.7 percent, to close on October 13, 2010 at $22.16 per share, on unusually heavy trading volume. The following day the Company's shares declined an additional $2.42 per share, or 10.9 percent, to close on October 14, 2010 at $19.74 per share, again on heavy trading volume. Cumulatively, over these two days St. Joe's shares declined a total of $4.80 per share, or over 19.5 percent.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.