Securities Class Action Filed Against Monsanto Company

By on August 10, 2010

monsantoA securities class action complaint was filed in the U.S. District Court for the Eastern District of Missouri on behalf of all purchasers of the common stock of Monsanto Company (NYSE: MON) during the period of  January 7, 2009 to May 27, 2010.  The lawsuit alleges, among other things, that Monsanto did not disclose that demand for the company’s Roundup® herbicide products was substantially declining as increased competition from Chinese producers ofgeneric glyphosate products was causing a depression in prices, forcing Monsanto to slash its own prices, and hurting margins.

On May 27, Monsanto announced that it was repositioning its Roundup® business, lowering its full-year 2010 guidance between $2.40 to $2.60 per share, from $3.10 to $3.30 per share, and lowering its free cash flow guidance from $400 million to $500 million, from an April projection of $900 million to $1 billion.  In reaction to the news, Monsanto’s stock price fell 4.54%, from $52.66, to close at $50.27 on extremely heavy volume.

As reported by Bloomberg, on the conference call with analysts, Chief Financial Officer Carl Casale said, “Gross profit from Roundup, the world’s most popular herbicide, will drop from $50 million to $200 million this fiscal year because of lower demand, falling prices, and costs to streamline the Roundup portfolio.”

Mark Gulley, a New York-based analyst at Soleil Securities Group said, “The generic product is in ample supply and the performance is just as good, so Monsanto had to recognize that.  This is particularly acute given lower crop prices.”

If you purchased any class of shares of Monsanto from January 7, 2009 through May 27, 2010, you may move the court no later than September 28, 2010, and request that the Court appoint you as lead plaintiff.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  To be appointed lead plaintiff, the Court must decide that your claim is typical of the claims of other class members, and that you will adequately represent the class.  Your share in any recovery will not be enhanced or diminished by the decision whether or not to serve as a lead plaintiff.  You can recover as an absent class member without moving for lead plaintiff.

Monsanto shareholders who who would like to receive more information may fill out the confidential form below.