CASES
HCA Holdings, Inc.
Class Period: Mar 9, 2011 to Mar 9, 2011
Lead Plaintiff Deadline: Dec 27, 2011 + Deadline passed
Summary of Case:
A securities class action has been filed against HCA Holdings, Inc. ("HCA" or the "Company") on behalf of all persons or entities who acquired shares of HCA common stock pursuant or traceable to the Company's false and misleading Registration Statement for its March 9, 2011 initial public offering ("IPO"). This case has been filed in the USDC - Tennessee (Middle).
The complaint alleges that on or about March 11, 2011, HCA filed its Prospectus for the IPO, which forms part of the Registration Statement and which became effective on March 9, 2011. At least 145.1 million shares of HCA common stock were sold to the public at $30 per share, raising $4.4 billion in gross proceeds for the Company and the selling shareholders.
On July 25, 2011, HCA issued a press release announcing disappointing second quarter 2011 financial results. On this news, HCA's stock declined $6.64 per share to close at $27.97 per share on July 25, 2011, a one-day decline of nearly 20%. Then, on October 1, 2011, Barron's issued an article entitled "Where Did the $15.8 Billion Go?", which questioned HCA's accounting practices. According to the article, HCA improperly accounted for two major acquisitions as recapitalizations. In both instances, HCA should have accounted for the transaction as an acquisition using the purchase accounting method, but instead opted to use what is the functional equivalent of a pooling-of-interests method, which method was eliminated by the Financial Accounting Standards Board in 2001 in order to improve the quality of information provided to investors and users of financial statements. By using this prohibited method, HCA overstated its reported earnings, as the Company was able to avoid taking significant charges, including substantial depreciation and amortization charges, which would have negatively impacted its earnings. On this news, HCA's stock declined $1.35 per share to close at $18.81 per share on October 3, 2011, a one-day decline of nearly 7% and a nearly 38% decline from the stock's IPO price.
According to the complaint, the true facts which were omitted from the Registration Statement were as follows: (a) the Company improperly accounted for its prior business combinations in violation of Generally Accepted Accounting Principles, causing its financial results to be materially misstated; (b) the Company failed to maintain effective internal controls concerning its accounting for business combinations; and (c) the Company failed to disclose known trends and uncertainties as required by SEC regulations concerning its revenue growth rate.
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.