Granite Construction Incorporated
- Company Name
- Granite Construction Incorporated
- Stock Symbol
- Class Period
- October 26, 2018 to August 1, 2019
- Motion Deadline
- October 12, 2019
- Northern District of California
The complaint charges Granite and certain of its officers with violations of the Securities Exchange Act of 1934. Granite is one of the largest diversified infrastructure companies in the United States. In the public sector, Granite focuses on heavy civil infrastructure projects such as roads, highways, and power-related facilities. In the private sector, the Company provides site preparation and infrastructure services for residential development, energy development, and other facilities.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants failed to disclose that the Company had assumed certain risks in connection with its heavy civil joint venture projects bid between 2012 and 2014, that there was an “untenable” imbalance of risk sharing between the Company and the joint venture project owners, and that, as a consequence, the Company was reasonably likely to incur additional costs for its joint venture projects and in connection with certain project disputes. As a result of this information being withheld from the market, Granite securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $55 per share.
On July 29, 2019, the Company disclosed that its second quarter 2019 financial results would be negatively impacted by non-cash charges related to four legacy unconsolidated heavy civil joint venture projects. As a result, Granite expected to report a net loss for the quarter in the range of $2.05 to $2.10 per diluted share. On this news, the Company’s stock price fell $7.98 per share, or nearly 18%, to close at $36.49 per share on July 30, 2019.
Then on August 2, 2019, before the market opened, the Company announced its second quarter 2019 financial results, reporting revenue of $789.5 million, including a $114.2 million reduction in revenue due to the charges disclosed earlier that week. On this news, the Company’s stock price fell $2.78 per share, or over 8%, to close at $31.22 per share on August 2, 2019.