St. Joe Company (The) (NYSE: JOE) Investor Securities Class Action Lawsuit 11/03/2010

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Company Name(s): 
St. Joe Company (the)
Case Name: 
St. Joe Company (the) Shareholder Class Action Lawsuit 11/03/2010
Case Status: 
Case Dismissed
Affected Securities
NYSE: JOE
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
11/03/2010
Class Period Begin: 
02/19/2008
Class Period End: 
10/12/2010
Court of Filing: 
U.S. District Court for the Northern District of Florida
Deadline To File for Lead: 
12/30/2010
Case Dismissed: 
05/16/2013
Summary: 

May 16, 2013 - The U.S. Court of Appeals for the Eleventh Circuit issued a mandate on the February 25, 2013 order on appeal.

February 25, 2013 - The U.S. Court of Appeals for the Eleventh Circuit affirmed the decision of the district court.

March 15, 2012 - The lead plaintiff filed a notice of appeal.

February 14, 2012 - The court denied the lead plaintiff's motion to alter judgment.

February 9, 2012 - The lead plaintiff filed a motion to alter judgment.

January 12, 2012 - The court granted the defendants' motion to dismiss.

October 24, 2011 - The defendants filed a motion to dismiss.

September 23, 2011 - The lead plaintiff filed an amended complaint.

August 24, 2011 - The court granted the defendants' motion to dismiss without prejudice.

April 6, 2011 - The defendants filed a motion to dismiss.

April 5, 2011 - The lead plaintiff's claims for violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 against all defendants are dismissed and numerous particular defendants are dismissed as parties to this case.

February 24, 2011 - The lead plaintiff filed an amended consolidated complaint.

January 25, 2011 - The lead plaintiff and lead counsel were appointed.

January 11, 2011 - All cases were consolidated.

January 3, 2011 - Lead plaintiff motions were filed.

November 3, 2010 - An investor in shares of St. Joe Company (The) (NYSE: JOE) filed a lawsuit in the U.S. District Court for the Northern District of Florida against St. Joe Company (The) over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff alleges on behalf of purchasers of the securities of The St. Joe Company (The), who purchased or otherwise acquired St. Joe Company (The) securities between February 19, 2008 and October 12, 2010, that St. Joe Company (The), certain of its officers and directors, its underwriter and auditors violated the Securities Act of 1933 and Securities Exchange Act of 1934 by failing to disclose and misrepresenting certain material adverse facts which were known to defendants or recklessly disregarded by them.

Florida based St. Joe Company (The) real estate development company reported decreasing revenue over the past four years by over 70%. Its 12 month total revenue went from $525.02million in 2006, to $371.55million in 2007, to $258.16million in 2008, and $138.26million in 2009. Its Net Income went from a Net Income of $51.02million in 2006 to a Net Loss of $130.02million in 2009.

Shares of St. Joe Company (The) (NYSE: JOE) traded as high as over $80 in 2005 before declining in mid 2006 to as low as $43.87 per share. During the second half of 2006 until mid 2007 St. Joe Company (The) shares regained value to almost $60 per share in April 2007. In the second half of 2007 NYSE: JOE shares fell to under $30 per share. During 2008 St. Joe Company (The) shares were able to hold value until fall 2008 when the financial crisis hit the markets and shares began to lose value. St. Joe Company (The) shares fell to as low as $14.59 per share in March 2009. Since its 10year low in March 09 shares regained value to its current 52weekHigh of $37.44 per share in April. St. Joe Company (The)’s shares lost since then twice significantly value, once from April to June where shares fell from $37 to $22 per share, and recently from over $24 to under $20 per share. Shares of St. Joe Company (The) fell after the Wall Street Journal and other news sources reported that Greenlight Capital Inc’s David Einhorn, who was introduced as the man behind the early, early call that Lehman Brothers was in deep trouble, had given a 139-slide PowerPoint presentation at the Value Investing Congress in New York in which David Einhorn raised a number of challenges for St. Joe Company (The)’s, including that the company is accounting for untouched land as developed and will probably have to take impairment charges since only minimal write-downs have been taken on its real estate portfolio. Mr. Einhorn's presentation 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 Company (The)'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."

David Einhorn proceeded to go through the various developments, citing St. Joe Company (The)’s progress reports on file with local authorities. Einhorn reportedly mentioned a case of one town, out of 2,600 units planned by 2011, St. Joe Company (The)’s only built 12 dwelling units and added “the local fire department said they wouldn’t build a fire station because there’s nothing going on here.” Einhorn reportedly also named other developments by St. Joe Company (The), such as a development that is advertised as beachfront, but appears to be no land in the development that’s actually by the beach, or another development that is next-door to a sewage facility. The Wall Street Journal further reported that that the basic thesis of Einhorn’s presentation was that “[St. Joe’s] holdings of Florida real estate are worth nowhere near the $746 million the company says they are worth.”

On this news, so the lawsuit, shares of the St. Joe Company (The) (NYSE: JOE) 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 Company (The)'s shares declined a total of $4.80 per share, or over 19.5 percent. St. Joe Company (The) (NYSE: JOE) stock closed on November 03 at $1966 per share.