Peabody Energy Corporation
|Company Name||Peabody Energy Corporation|
|Class Period||April 03, 2017 to October 28, 2019|
|Lead Plaintiff Motion Deadline||November 27, 2020|
Peabody is the largest coal mining company in the world with 23 coal mines organized into six business segments. Its largest segment is the Australian Metallurgical Mining segment, which accounted for 23.1% of Peabody’s revenue in 2016. Peabody’s most profitable operation is the North Goonyella mine, which is within the Australian Metallurgical Mining segment, and in 2017, the mine generated 20% of the Company’s total operating profit.
On September 28, 2018, Peabody announced that it did “not expect any production from North Goonyella in the fourth quarter of 2018” due to a fire occurring within the mine.
On this news, the Company’s stock price fell $5.54, or over 13%, to close at $35.64 per share on September 28, 2018, thereby injuring investors.
Then, on February 6, 2019, Peabody reported disappointing financial results for fourth quarter 2018 due to remediation costs and lack of production at the North Goonyella mine. The Company also announced that production would not resume at the mine until the “early months of 2020.”
On this news, the Company’s stock price fell $3.80, or 11%, to close at $32.05 per share on February 6, 2019, thereby injuring investors further.
Then, on October 29, 2019, Peabody disclosed that operations at the North Goonyella mine would not resume for three or more years due to local regulators’ strict restrictions.
On this news, the Company’s stock price fell $3.56, or 22%, to close at $12.48 per share on October 29, 2019, thereby injuring investors further.
The complaint filed in this class action alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the Company had failed to implement adequate safety controls at the North Goonyella mine to prevent the risk of a spontaneous combustion event; (2) the Company failed to follow its own safety procedures; (3) as a result, the North Goonyella mine was at a heightened risk of shutdown; (4) the Company’s low-cost plan to restart operations at the North Goonyella mine posed unreasonable safety and environmental risks; (5) the Australian body responsible for ensuring acceptable health and safety standards, the Queensland Mines Inspectorate (“QMI”), would likely mandate a safer, cost-prohibitive approach; (6) as a result, there would be major delays in reopening the North Goonyella mine and restarting coal production; and (5) that, as a result of the foregoing, Defendants’ statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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