Summary of Case:
A securities class action has been filed against Pilgrim's Pride Corporation (Ticker: PPC) ("Pilgrim's Pride" or the "Company") on behalf of all common stock purchasers from May 5, 2008 through Septemer 24, 2008 (Class Period). The complaint alleges that Pilgrim's Pride and certain of its officers and directors violated the Securities Exchange Act of 1934. Pilgrim's Pride is a producer of poultry in the United States, Mexico and Puerto Rico. The complaint alleges that during the Class Period, defendants misrepresented the Company's financial condition and concealed the impact of the Company's capital problems on its business and prospects. Due to defendants' positive, but false, statements, Pilgrim's Pride's stock closed as high as $26.85 per share in late May 2008.
On September 24, 2008, after the market closed, Pilgrim's Pride issued a press release announcing that it had notified its lenders that it expected to report a significant loss in the fiscal fourth quarter ending September 27, 2008, due to high feed-ingredient costs, continued weak pricing and demand for breast meat, and the significant negative impact of hedged grain positions during the quarter.
With the news of Pilgrim's Pride's significant losses, its shares fell to $3.84 per share on September 25, 2008 from $10.26 per share on September 23, 2008, and from the Company's Class Period high of $26.85 per share in late May 2008. According to the complaint, defendants were aware of the following material undisclosed information which contradicted their public statements during the Class Period: (a) the Company's hedges to protect it from adverse changes in costs were not working and in fact were harming the Company's results more than helping; (b) the Company's inability to continue to use illegal workers would adversely affect its margins; (c) the Company's financial results were continuing to deteriorate rather than improve, such that the Company's capital structure was threatened; (d) the Company was in a much worse position than its competitors due to its inability to raise prices for customers sufficient to offset cost increases, whereas its competitors were able to raise prices to offset higher costs affecting the industry; and (e) the Company had not made sufficient changes to its business model to succeed in the more difficult industry conditions.
