The action alleges that the statements made by Best Buy were misleading because they failed to disclose the following adverse facts, among others: (1) that Best Buy's mall-based Sam Goody stores were performing worse than expected, requiring Best Buy to shrink the sizes of such Sam Goody stores and close some of them altogether; (2) that Best Buy's "remerchandising" of the Sam Goody stores was failing badly, depressing Best Buy's operations and earnings; (3) based on the foregoing, the Musicland acquisition was a failure because it saddled Best Buy with a money-losing chain of stores; (4) that Best Buy was experiencing growing competition from mass discounters like Wal-Mart, which was devoting more advertising to electronics to increase consumer awareness of its presence in the category and materially impacting Best Buy's profit margins; (5) that Best Buy's strategy of capital expenditures to enhance the high-tech look of their stores and raising the service level did not yield expected increases in revenues; and (6) that the defendants lacked a reasonable basis for their positive statements about the company and their earnings projections.

The class period ends on August 8, 2002. On that date, Best Buy issued a press release announcing that it was lowering its earnings outlook for its second fiscal quarter to a range of 17 to 21 cents per diluted share, compared with prior guidance of 30 to 32 cents per diluted share. In response to this announcement, the price of Best Buy common stock declined sharply, falling from $30.80 per share on August 7, 2002, to $19.55 per share on August 8, 2002, a one-day decline of more than 36%. During the class period, prior to the disclosure of the true facts about the company, Best Buy insiders sold more than $35 million of their personally-held Best Buy common stock to the unsuspecting market and the company completed a debt offering raising hundreds of millions of dollars.

If you bought Best Buy publicly traded securities between January 9, 2002, and August 7, 2002, and you wish to serve as lead plaintiff, you must request appointment by the court no later than January 19, 2004. Any member of the purported class may request appointment by the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a class member.