Hotels.com is an online consolidator of hotel accommodations, contracting with hotels in advance for volume purchases and guaranteed availability of hotel rooms at wholesale prices which are then sold to customers.
The original Complaint charges Hotels.com and certain of its officers and directors with violations of the Securities Exchange Act of 1934. On October 10, 2002, USA Interactive announced that it was ending its ongoing process to acquire all of the shares of Hotels.com that it did not own. Hotels.com then claimed that its prospects were "excellent" and days later, on October 23, 2002, the Company projected phenomenal growth for its Q4, including Q4 02 revenue of $283-$289 million and cash earnings per share of $0.46 to $0.47. These projections, on top of the Company's October 10, 2002 announcement, sent the Company's shares soaring to above $60 per share, eventually hitting a Class Period high of $75 on December 2, 2002. Then on January 6, 2003, with more than $42 million of insider trading proceeds, the Defendants announced that the Company would fall materially short of hitting its forecasted projections. On this news, the Company's shares dropped to $44 from $59, a market cap loss of more than $855 million.
According to the docket posted, on September 28, 2004, the Court entered the Order signed by U.S. District Judge David C. Godbey granting the Defendants’ motion to dismiss the Plaintiffs' claims partially with prejudice and partially without prejudice. Plaintiffs had 30 days within the date of the Order to file an amended Complaint. Instead, on March 4, 2004, the Plaintiffs filed a notice of appeal in the Fifth Circuit Court of Appeals which was later dismissed with prejudice, pursuant to the stipulation of the parties. On November 21, 2005, the Court entered the Final Judgment Nunc Pro Tunc signed by Judge Godbey. According to the Final Judgment, the Court expressly enters this final judgment nunc pro tunc retroactive to February 24, 2005, the date when the Court's judgment became final by operation of law. The Court orders that Plaintiffs take nothing by their suit. Each party shall bear their own costs.
