Opinion ID: 731320
Heading Depth: 5
Heading Rank: 2

Heading: The 1991 Third Quarter Projections

Text: 63 In a July 30, 1991 press release, MIPS announced that it was going to take a significant restructuring charge in the third quarter. In a conference call with market analysts that same day, Ludvigson said that the restructuring charge would be significant enough to put [MIPS] in a loss position for the third quarter and for total year 1991. Ludvigson, however, represented that, without the restructuring charge, the loss of revenue for the third quarter would be small. 64 Plaintiffs contend that these statements were misleading because defendants knew that there would be a huge loss without the restructuring charge. Plaintiffs point out that, only five days before the conference call, at the MIPS' Board of Directors meeting, defendants predicted a loss of more than $4.3 million without the restructuring charge. 65 The district court, however, rejected plaintiffs' evidence and found that MIPS' forecasts were not inconsistent with the financial information they had concerning product and service revenue. At the July 30, 1991 teleconference, MIPS disclosed facts which suggested that it would suffer a multi-million dollar loss in the third quarter of 1991, independent of the restructuring charge. This forecast was consistent with the information that defendants had. We therefore conclude that the third quarter forecast is not actionable as a false or misleading statement. 66