According to the complaint filed June 29, 2012, this securities class action on behalf of all purchasers of the common stock of GM pursuant in or traceable to the Company's November 18, 2010 initial public offering (the "IPO" or the "Offering") pursuant to the Securities Act of 1933 (the "Securities Act").
In July 2011, reports began to surface that GM had engaged in an extraordinary inventory build-up. In particular, an article published by Bloomberg on July 5, 2011 revealed that GM may have been unloading excessive inventory on dealers, a practice known as "channel stuffing," in order to create the false impression that
GM was recovering and sales and revenues were rising. The Bloomberg article stated that GM's truck inventory swelled to 122 days worth of average sales whereas, by comparison, GM's less profitable car inventory was limited to 60 to 70 days of average sales, Ford was maintaining only a 79 day inventory on comparable trucks, and GM's truck inventory during the years 2002-2010 had similarly averaged only 78 days of average sales. By November 2011, GM dealer inventories were 30% higher than they were on September 30, 2010 (the end of the last full quarter before the November 18, 2010 IPO) and 62% higher than they were at the end of 2009.
During the three months following the Bloomberg article, GM's share price fell from more than $31.00 to below $20.00, far below the IPO price of $33.00, and continues to trade around $20.00 today.
On February 1, 2013, an amended class action complaint was filed by the plaintiff against the defendants in this proceeding.
On April 09, 2013, pursuant to Fed. R. Civ. P. 41(a)(1), Lead Plaintiff voluntarily dismissed, with prejudice as to Lead Plaintiff only, claims alleging violations of Section 12(a)(2) of the Securities Act of 1933. Lead Plaintiffs' claims alleging violations of Sections 11 and 15 of the Securities Act of 1933 shall proceed in this action.
On September 4, 2014, the Court issued a Memorandum Opinion and Order that dismissed the Amended Complaint in its entirety with prejudice.