Opinion ID: 2820089
Heading Depth: 3
Heading Rank: 1

Heading: Specific Misleading Statements

Text: The Complaint quotes several statements by Rathke, Blanford, and other Green Mountain spokesmen, made on specific dates, indicating that Green Mountain was struggling to meet demand and had no excess inventory. During the February 2 first quarter investor call, the Complaint quotes an executive reiterating Green Mountainʹs desire to ʺfulfill unmet demand.ʺ App. at 42. Similarly, during the May 3 second quarter investor call, the Complaint quotes a spokesperson as saying ʺwe are not building any excess inventories.ʺ Id. at 43. During the July 27 third quarter investor call, the Complaint quotes Rathke and Blanford as stating that Green Mountain was at ʺappropriate inventory levels.ʺ Id. at 45. The Complaint is replete with statements from various top executives that Green Mountain was struggling to meet demand and business was booming throughout the Class Period. The Complaint further alleges that Green Mountainʹs fourth quarter revenue gap is indicative of a ʺfalse growth story.ʺ Green Mountain argues that it can explain its $50 million revenue gap and corresponding inventory spike from the end of November as a mere sales miss. But a significant gap in fourth quarter sales tends to support Plaintiffsʹ claim that inventory was misleadingly ‐ 22 ‐ characterized throughout the Class Period. Cf. Novak, 216 F.3d at 312‐13. Moreover, the explanation for the revenue gap and inventory spike that Green Mountain offers is entitled to little weight at this stage of litigation, when we must ʺaccept all factual claims in the complaint as true and draw all reasonable inferences in the plaintiffʹs favor.ʺ Simon v. KeySpan Corp., 694 F.3d 196, 198 (2d Cir. 2012). We therefore conclude that Plaintiffs sufficiently allege the materially misleading nature of Green Mountainʹs statements regarding its inventory.