Beazer Homes USA, Inc.

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Case Summary

Company Name
Beazer Homes USA, Inc.
Stock Symbol
Class Period
August 1, 2014 to May 2, 2019
Motion Deadline
August 4, 2019
Southern District of New York

The complaint charges Beazer Homes and certain of its officers with violations of the Securities Exchange Act of 1934.  Beazer Homes designs, constructs, and sells single-family and multi-family homes for entry-level, move-up, or retirement-oriented home buyers under the Beazer Homes, Gatherings, and Choice Plans names.  The Company sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Delaware, Indiana, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina.

The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations.  Specifically, defendants failed to disclose that Beazer Homes’ California assets classified as land held for future development were deteriorating in value or improperly valuated, which created a foreseeable risk of an eventual substantial impairment that would negatively impact the profitability of the Company.  As a result of this information being withheld from the market, Beazer Homes securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $21 per share.

On May 2, 2019, Beazer Homes announced its financial and operating results for the second quarter of 2019, including a net loss from continuing operations of $100.8 million for the quarter, reflecting $147.6 million in impairments on certain California assets the Company had acquired before 2007.  According to defendants, the impairments were in “response to recent changes in market conditions,” which made it “necessary to reduce prices in some of [the Company’s] active communities, all of which were previously classified as land held for future development.”  Analysts expressed concern regarding the timing of the impairment, given that the California assets had been on Beazer Homes’ books for more than 11 years.  On this news, the price of Beazer Homes stock fell more than 12% to close at $12.51 per share on May 3, 2019.

Class Period: August 1, 2014 - May 2, 2019
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