In Re Homestore. Com, Inc. Securities Litigation

ORDER REGARDING MOTIONS TO DISMISS

INTRODUCTION

This Complaint provides one explanation of how the now-infamous internet “bubble” occurred. Plaintiff in this putative class action is a shareholder in Homestore.com, Inc., (“Homestore”) an internet-based company that provides links to a wide range of services related to home ownership, including real estate sales, home renovation, and relocation services. Plaintiff alleges in its complaint that several Home-store insiders, with the knowledge of Homestore’s auditor and the active participation of various outside business entities, unlawfully created revenue through various types of dubious transactions in order to prop up Homestore’s stock price. Plaintiff claims that these transactions, combined with improper accounting and the release of written and oral public statements made to the SEC, analysts, and the general public, perpetrated a fraud on Homestore’s shareholders and the investing public in violation of Federal securities statutes and regulations promulgated thereunder. Eventually, Homestore was forced to restate seven quarters of revenue because of the improper transactions and accounting. By this action, plaintiff seeks…