MARCH 2012 - Case dismissed.
A current long term investor in Best Buy Co., Inc. (NYSE:BBY) shares filed a lawsuit against Best Buy’s directors and certain of its officers over alleged breaches of fiduciary duties. The plaintiff claims that directors through allegedly false and misleading statements predicted strong earnings for Best Buy for 2011 but knew Best Buy Co. Inc was headed for a slowdown.

The lawsuit by the current long term investor against the Best Buy directors for alleged breaches of fiduciary duties follows an earlier lawsuit against Best Buy Co, Inc filed by investors who purchased Best Buy Co., Inc. (Public, NYSE:BBY) common stock only during the period between September 14, 2010 and December 13, 2010. According to that lawsuit the plaintiff alleges that Best Buy Co., Inc. violated the Securities Exchange Act of 1934 issuing between September 14, 2010 and December 13, 2010 false and misleading statements concerning demand for its consumer electronics product offerings and the Best Buy’s true financial condition.

On December 14, 2010, Best Buy Co., Inc. reported its third quarter 2011 financial results. According to the complaint, Best Buy Co., Inc. reported that as product sales it knew to be weak or declining even as early as June 2010 had continued across the board, it had missed Wall Street revenue expectations by a wide margin, reporting $0.54 per share, compared to Wall Street consensus estimates of $0.61. In addition, so the plaintiffs, as a result of weak sales demand and despite the increased FY 2011 earnings forecast in September 2010, Best Buy Co., Inc. reduced its FY 2011 earnings forecast of $3.55-$3.70 to $3.20-$3.40 – well below even the initial FY 2011 earnings forecasts set in March 2010. Finally, Best Buy Co., Inc. disclosed that it had repurchased 11 million shares in the quarter, for a total of more than 31 million shares repurchased during the first three quarters of FY 2011, which would have a $0.12 per share positive impact on the reduced FY 2011 EPS forecast of $3.20-$3.40, so the lawsuit.

The plaintiff claims that on this news there was an immediate and massive sell off of Best Buy Co’s shares NYSE:BBY on December 14, 2010, and a stock price decline of 22% from a high of $45.63 per share between September 14, 2010 and December 13, 2010 to close at $35.52 per share on December 14, 2010. Recently NYSE:BBY shares traded at $33.04 per share.