Full opinion text
MEMORANDUM OPINION AND ORDER HOLWELL, District Judge. INTRODUCTION Pending before the Court are three related suits brought against IAC/InterActi-veCorp (“IAC” or the “Company”) and certain directors and high-ranking officers. Plaintiffs in the first suit represent an uncertified class of investors who purchased or otherwise acquired IAC publicly traded securities between March 31, 2003, to August 3, 2004 (“class period”), including former shareholders of companies whose stock was exchanged for IAC stock. The other two suits are shareholder derivative actions that the Court has consolidated with the class action suit for pretrial purposes. The gravamen of both the Consolidated Amended Class Complaint (“Class Complaint” or “CC”) and the Verified Consolidated Shareholder Derivative Complaint (“Derivative Complaint” or “DC”) is that, during the class period, defendants inflated the price of IAC’s stock by making materially false and misleading statements or omissions regarding the health of IAC’s travel business, thus enabling IAC to maximize the value of its stock in the stock-for-stock acquisitions of LendingTree, Expedia, and Hotels.com, and permitting certain individual defendants to benefit by selling 7.78 million shares of their IAC stock for proceeds of $258.9 million. Following the release of IAC’s second-quarter 2004 earnings, IAC’s stock price dropped by sixteen percent or $4.23 per share, from $27.03 per share at close on August 3, 2004 to $22.80 at close on August 4, 2004. Defendants have moved to dismiss the Class Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and have moved to dismiss the Derivative Complaint pursuant to Rule 23.1 for failure to make demand on IAC’s board of directors. For the reasons set forth below, the Court grants defendants’ motions [68] and [69], thereby dismissing both Complaints in their entirety. BACKGROUND 1. The Parties Class plaintiffs are IAC shareholders who purport to bring claims on behalf of a putative class of shareholders who purchased or otherwise acquired shares of IAC between March 31, 2003 and August 3, 2004. (CC ¶¶ 14-19.) Derivative plaintiffs Lisa Butler and Stuart Garber likewise allege to be owners and holders of IAC common stock. (DC ¶¶ 21-22.) Derivative plaintiffs assert factual allegations identical to those made in the Class Complaint. (Compare CC ¶¶ 40-94 with DC ¶¶ 56-108.) IAC, a Delaware corporation headquartered in New York City, sells goods and services over the internet. (CC ¶¶ 20, 32; DC ¶ 6.) IAC’s strategy during the class period was to become a multi-brand interactive commerce company. (CC ¶¶ 2, 45; DC ¶¶23, 60.) IAC was organized into eight divisions, namely Travel (Expedia, Hotels.com, Hotwire, Interval International, and TV Travel Shop), Electronic Retailing (HSN, a home shopping service), Ticketing (Ticketmaster and ReserveAmeriea), Personals (Match.com), Financial Services and Real Estate (LendingTree.com), Tel-eservices (Precision Response Corporation), Local and Media Services (Citys-earch, Evite, Entertainment Publications, Inc. and TripAdvisor, Inc.), and Interactive Development (ZeroDegrees). (CC ¶¶ 2, 32; DC ¶ 6.) Prior to being spun off into a separate public company in August of 2005, the travel business was IAC’s largest operating segment. (CC ¶ 32; DC ¶ 6.) In fiscal year 2003, IAC sold over $10 billion in travel services, and Travel alone provided seventy percent of the Company’s net income during the first six months of 2004. (CC ¶ 32; DC ¶ 6.) The following are the officers and directors who are named as individual defendants in the Class Complaint: Barry Diller, Victor A. Kaufman, Dara Khos-rowshahi, Julius Genachowski, Richard N. Barton, Erik C. Blachford, Robert R. Bennett, Edgar Bronfman, Jr., Donald R. Keough, Mariee-Josée Kravis, John C. Malone, Gen. H. Norman Schwarzkopf, Alan Spoon, and Diane von Furstenberg. (CC ¶¶ 21-31.) The Class Complaint alleges that all of the individual defendants, with the exception of Genachowski and Blachford, signed allegedly false and misleading registration statements pursuant to IAC’s acquisitions during the class period. (Id. ¶¶ 30-31.) Barry Diller is the chief executive and chairman of the Company. (Id. ¶ 21.) Victor A. Kaufman is vice chairman “of the Board of Directors,” and he served previously as chairman of the Company and as its chief financial officer. (Id. ¶ 26.) At the time that the Class Complaint was filed, Dara Khosrowshahi was IAC’s chief financial officer and an Executive Vice President. Julius Genaehowski was Chief of Business Operations and an Executive Vice President. (Id. ¶ 22.) Bennett, Bronfman, Keough, Kravis, Malone, Schwarzkopf, Spoon, and von Furstenberg were directors of IAC at the time of the acquisitions (collectively, “Director Defendants”). (Id. ¶ 30.) Richard N. Barton became a member of IAC’s board of directors in February 2003. (CC ¶ 24.) Barton founded Expedia and served as its president and chief executive, and as a director, from September 1999 to March 2003, when IAC announced that it would acquire the rest of the shares of Expedia that it did not already own. (Id. ¶¶ 24, 37.) The Class Complaint also names as defendant Erik C. Blachford, who became the new Chief Executive Officer of Expedia following Barton’s resignation, and, after Expe-dia merged with IAC, served as president and chief executive of IAC Travel until January 1, 2005. (Id. ¶¶ 25, 40.) The Derivative Complaint names all of the individuals described above, with the exception of Blachford, and in addition names the following individuals as defendants: Steven Rattner, a director of IAC since April 2004; Anne M. Busquet, a director of IAC at all relevant times until May 2003; and Jean-Renee Fourtou, a director of IAC at all relevant times until June 2003. (DC ¶¶ 24-40.) II. Allegations of Wrongdoing The following allegations are set forth in the Complaints and are accepted as true for purposes of these motions to dismiss. Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir.1998). During the class period, IAC’s goal was to become the world’s largest and most profitable interactive commerce company by pursuing' a multi-brand strategy. (CC ¶ 45; DC ¶ 60.) IAC grew through aequi-sitions. (CC ¶ 35; DC ¶ 9.) Prior to the class period, the Company purchased controlling interests in Ticketmaster and Ex-pedía and acquired substantially all of the assets of the two entities that operated Hotels.com’s websites. Id. During the class period, IAC acquired LendingTree as well as the shares that IAC did not already own in Expedia and Hotels.com in stock-for-stock transactions. (CC ¶¶ 40, 44, 48; DC ¶¶ 56, 59, 63.) On September 22, 2003, IAC announced the purchase of Hotwire, a discount travel website founded by Texas Pacific Group and American Airlines, America West Airlines, Continental Airlines, Northwest Airlines, United Airlines, and USAirways. (CC ¶¶ 65-67; DC ¶¶ 79-82.) The Company also announced the formation of a single travel division, IAC Travel, that would include Expedia, Hotels.com, Interval International, TV Travel Shop, and Hotwire. (CC ¶¶ 2, 25; DC ¶ 6.) On November 5, 2003, IAC announced in its Form 8-K filed with the Securities and Exchange Commission (“SEC”) that its earnings projection for full-year 2004— measured as Operating Income Before Amortization (“OIBA”), IAC’s principal profitability metric — was “in the range of $1.0 billion to $1.2 billion.” (Form 8-K, Exhibit 99.3 (Nov. 5, 2003) (Defs.’ Mot. to Dismiss the Class Complaint (“Mot. Dismiss CC”), DiPrima Ml Ex. 6); CC ¶ 69; DC ¶ 83). On the quarterly analyst call following this earnings release, Diller stated that “we believe we will continue to have strong growth over the next years” and that “we do know at least enough about next year to tell you that our best guess is that our operating income, before amortization ... ought to be between $1 billion and $1.2 billion.” (CC ¶ 70; DC ¶ 84.) Management repeated this projection at its November 11 “Investors Day” conference. (CC ¶¶ 74-76; DC ¶¶ 88-90.) A. Supplier and Customer Problems During the class period, IAC Travel’s subsidiaries acted primarily as intermediaries between suppliers and consumers by aggregating travel-related products such as hotel rooms and airline tickets and selling them over the internet. (CC ¶ 32; DC ¶¶ 6, 23.) For example, Hotels.com contracted with major hotel chains for nonexclusive rights to sell hotel room bookings for the hotel chains in exchange for a fee. (CC ¶ 33; DC ¶ 7.) A customer reserving a hotel room on Hotels.com’s website paid Hotels.com directly; Hotels.com then paid a pre-negotiated price to the hotel chain for that room. Hotwire worked similarly: the hotel and airline partners permitted Hotwire to access their unsold inventory of hotel rooms and airline seats for sale at discounted prices. Expedia, on the other hand, bought rooms wholesale and then marked them up for sale at retail prices. (Id.) Because of IAC Travel’s role as an intermediary, its business model depended on the ability of its subsidiaries to obtain a favorable supply of hotel rooms and airline seats. Plaintiffs allege, however, that during the class period, IAC concealed significant supply problems within its travel business. (CC ¶¶ 9(a), 97(a); DC ¶¶ 15, 109.) Specifically, class plaintiffs allege that “defendants made false statements ... affirmatively misrepresenting and concealing that (i) IAC lacked long-term contracts with airlines; (ii) the supply of hotel rooms for IAC was being reduced due to disputes with hotel chains, the hotel chains’ improved on-line offerings and the hotel chains’ increasing ability to fill rooms; and (iii) customer demand for IAC’s hotel rooms was shrinking because of overbilling disputes and the ability to get the same rates by going directly to the hotel chains’ sites.” (CC ¶ 3.) The Court now sets forth plaintiffs’ allegations in more detail, treating the alleged dissatisfaction of hotel chains and customers together. 1. Airplane Seats During the class period, Hotwire had difficulty obtaining access to airlines’ unsold inventory of airplane seats at discounted prices — a problem that defendants allegedly failed to disclose until the close of the class period. (CC ¶¶ 87-89; DC ¶¶ 101-103.) Plaintiffs conclude from this fact that Hotwire lacked enforceable, long-term volume and pricing agreements with Hotwire’s founding airlines. (CC ¶ 9(k); DC ¶ 109(k).) Such agreements were necessary, plaintiffs argue, to ensure that the airlines continued to provide an ample supply of discounted seats to Hotwire after IAC’s acquisition of Hotwire in 2003. (CC ¶ 67; DC ¶ 82.) “This was particularly true since American Airlines, Continental Airlines, Northwest Airlines, United Airlines, and Delta Airlines operated Orbitz,” a competing discount travel site established in 2001. (Id.) Because IAC lacked such agreements, Hotwire’s founding airlines were able to shift business away from IAC Travel by selling tickets through their own websites, or through Orbitz and other discount websites. (Pis.’ Opp’n to Mot. Dismiss CC (“CC Opp’n”) 4.) 2. Hotel Rooms IAC’s hotel business, like its air travel business, depended on obtaining access to unsold inventory at discounted prices. As reported by “former IAC employees,” however, during the class period IAC experienced infrastructure problems and engaged in a variety of “bad business practices” that damaged its relationships with suppliers and customers and eventually caused a decline in its supply of hotel rooms. (CC ¶¶ 9(a), 97(a); DC ¶ 109.) For example, plaintiffs allege that certain customers were double-billed for hotel rooms purchased on the Company’s websites because the Company failed to report hotel room sales to the chain hotels in a timely or accurate manner. (CC ¶¶ 9(a)(i), 97(a)(i); DC ¶¶ 58(a), 109(a).) IAC also allegedly reserved hotel rooms for longer terms than customers requested, necessitating refunds. (CC ¶ 9(g), 97(g); DC ¶ 109(n).) According to former IAC employees, refunds to customers for overbill-ing took as long as two months, and such refunds represented ten to fifteen percent of telephone sales figures, creating customer dissatisfaction and causing IAC’s cash position to be overstated. (CC ¶¶ 9(d), 97(d); DC ¶ 109(k)) Plaintiffs also allege that, instead of receiving a discounted rate on hotel rooms purchased through Company websites, some customers were actually being charged rates above the hotel’s public prices. (CC ¶¶ 9(a)(iii), 43(c), 97(a)(iii); DC ¶¶ 58(d), 109(c).) These problems purportedly led customers to choose other online reservation providers or to buy directly from hotel websites. (Id.) According to plaintiffs, hotel chains were equally unhappy. (CC ¶¶ 9(a)(i)-(iv), 97(a)(i)-(iv); DC 1ffl58(a)-(d), 109(a)-(d).) Hotel chains were dissatisfied with the Company’s practice of representing on its websites that a particular hotel’s rooms were sold out when in fact rooms were still available through other venues, such as the hotel’s own website. (Id.) Plaintiffs also allege, based on information obtained from unidentified “former employees,” that IAC held up payments to hotel chains in order to overstate its cash position, “thereby eroding any remaining goodwill between the Company and its suppliers.” (CC ¶¶ 9(c), 43(0, 97(c); DC ¶¶ 58(c), 109(j).) Exacerbating supply problems was the fact that many hotel chains had launched their own websites where customers could book rooms. (CC ¶¶ 9(h), 97(h); DC ¶ 109(o).) These factors, together with customer dissatisfaction, allegedly led hotel chains to limit the supply of rooms that they made available to the IAC Travel’s subsidiaries, or to abandon their relationships with IAC altogether. Most of plaintiffs’ allegations regarding hotel and customer dissatisfaction are described generally, but they do provide one specific example of a hotel chain that was dissatisfied with IAC. In early 2003, IAC’s subsidiary Expedia entered an agreement to promote hotels owned by the InterContinental Hotels Group, which owns the hotel brands InterContinental Hotels and Resorts, Crowne Plaza, and Holiday Inn, among others. (CC ¶ 39.) By April 2004, however, InterContinental was displeased with IAC primarily because Expedia and Hotels.com: failed to clearly present fees to customers, instead lumping together fees and taxes; showed InterContinental’s rooms as “sold out” when the websites had merely exhausted their allocation of discount rooms, diverting potential sales to other hotels; and transmitted reservations via fax that had to be reentered manually into the hotel’s reservation system. (CC ¶¶ 80, 90; DC ¶¶75, 94.) Following the close of the class period, on August 16, 2004, InterContinental announced that it would be terminating its relationship with IAC Travel. (CC ¶ 90; DC ¶ 104.) Finally, the Complaints allege that the Company understated its tax liabilities by paying state and local occupancy taxes based on the wholesale rate remitted to the hotel chains rather than at the higher retail rates paid by customers. (See CC ¶¶ 60-64; DC ¶¶ 75-78.) 3. Accounting Practices The Complaints also allege in the most general terms that the Company’s manipulations of revenues and cash flows — resulting, for example, from overbilling and cancellations — rendered IAC’s reported financial results false and misleading. (See, e.g., CC ¶ 9(b) and DC ¶ 109(i) (“To conceal deterioration in the hotel business ... IAC began to provide only three data points on the business: total revenues, OIBA [Operating Income Before Amortization] ... and operating profits....”); CC ¶ 9(c) and DC ¶ 10900 (“IAC’s cash position ... was overstated by the Company’s practice of holding up payments to hotel chains that it otherwise owed.... ”); CC ¶ 9(g) and DC ¶ 109(n) (“Hotels.com manipulated its results by overstating its accounts receivables.”); CC ¶ 9(j) and DC ¶ 109(q) (“Hotels.com had extremely poor controls and systems which made accounting manipulations not only possible but also likely.”); CC ¶ 101 (“Defendants achieved this fagade of success, growth and strong future business prospects by blatantly misrepresenting earnings”); CC ¶ 105 (stating that IAC engaged in a “scheme to inflate reported earnings”).) Despite these allegations, class plaintiffs devoted only a single footnote in their opposing papers to this issue (see CC Opp’n 7 n. 4), and at oral argument, counsel for class plaintiffs stated that they are not asserting a claim that the financial statements were false or that the Company failed to comply with GAAP [Generally Accepted Accounting Principles] (see Oral Argument Tr. 10, Oct. 12, 2006.). Accordingly, the Court considers any claims regarding the truthfulness of the Company’s reported financial statements to have been abandoned by class plaintiffs. C. Defendants’ Trades Plaintiffs allege that IAC concealed its supply problems during the class period, causing IAC’s stock to trade at artificially inflated levels. (CC ¶¶ 4, 95; DC ¶¶ 11, 50, 52.) In early 2003 IAC was trading below $25 per share, but on July 7, 2003 IAC’s share price reached a class-period high above $40 per share. (CC ¶¶ 6, 10, 92; DC ¶¶ 17, 55, 106.) The inflated share price allegedly benefited IAC by permitting it to maximize the value of its stock in the stock-for-stock acquisitions of Len-dingTree, Expedia, and Hotels.com. (CC ¶¶ 4, 95; DC ¶¶ 11, 52.) In addition, certain individual defendants allegedly benefited from the inflated share price by selling 7.78 million shares of their IAC stock for proceeds of $258.9 million. (CC ¶¶ 10, 29, 95; DC ¶¶ 55, 111.) Specifically, defendant Diller sold 5,329,000 shares worth $177,649,570 in three transactions dated May 7, -2003, June 3, 2003, and February 13, 2004. (CC ¶ 95; DC ¶ 111.) The largest of these transactions by far was the May 7, 2003 transaction, in which Diller sold 4,500,000 shares worth $147,250,350. Id. Barton sold 1,256,350 shares worth $40,626,787 in regularly scheduled transactions of 20,000 or 28,150 shares per week between August 14, 2003 and July 29, 2004. Id. Genachowski sold 327,499 shares worth $8,230,235 between May 7, 2003 and January 14, 2004; Kaufman sold 842,862 shares for $28,328,785 between May 7, 2003 and February 10, 2004; and Khos-rowshahi sold 120,514 shares worth $4,159,267 between May 29, 2003 and December 24, 2003. Id. Defendants also caused IAC to repurchase 62 million shares of its stock on the open market. (CC ¶ 4; DC ¶ 11.) D. Alleged Disclosures at the Close of the Class Period Plaintiffs allege that defendants made a number of disclosures at the close of the class period. On August 3, 2004, IAC issued its second quarter 2004 earnings release in which it disclosed that its quarterly net income had fallen twenty-five percent ($23 million) from the same quarter in 2003. (CC ¶ 86; DC ¶ 100.) On the conference call on August 3, Roger Clark, Vice President of Investor Relations, discussing these results, stated: [I]f you dig deep into this of course, there are some supply issues, and, of course, the second quarter was probably the deepest cut of it. Certainly internationally where all travel was down and is beginning I think to rebound. But other than that and other than Hotwire, which is definitely a significant issue, we don’t think, again, it’s structural. We don’t think it’s long term. We think that the supply issues that we have had that have given us a lesser discounts as the year progresses, we don’t think it’s going to come back fast, but we definitely think it will come back. (CC ¶ 87 (emphasis added); DC ¶ 101.) Plaintiffs allege that this statement and the announcement that “revenues were well short of analyst expectations” made “it evident that the defendants’ prior statements that the Travel business was ‘on track’ were false.” (CC ¶ 88; DC ¶ 102.) Defendants also announced that 2004 earnings were expected to come in at $1.0 billion, the low end of the projected range. IAC’s stock price declined on this news by sixteen percent or $4.23 per share, from $27.03 per share at close on August 3, 2004 to $22.80 at close on August 4, 2004. (CC ¶ 88; DC ¶ 102.) On August 5, Diller sent an e-mail to IAC employees in which he recognized that the announcement that IAC expected earnings for 2004 to come in at the lower end of the range projected in November 2003 had disappointed the market, causing the stock to drop: We said on the call that it was a good quarter, and it was. What wasn’t good is that we, your management, raised expectations too high at our Investor Day last November and are now paying the price. Added to that, and I do believe inappropriately, I was far too defensive in replying to analysts’ questions.... All of these are true but the higher truth is we did disappoint the estimates for growth set by our own hands and by not lowering them earlier in the year as the strain became clear we mightily exacerbated the problem. That, and the extremely jittery markets of the last months did the rest_[T]he responsibility for- this, allowing the bar to be set unreasonably high, and then not having ■ the proper patient focus on our conference call, is fully mine. (CC ¶ 7; DC ¶ 18.) Plaintiffs argue that in this e-mail “Diller conceded he had overstated the Company’s then-existing business operations and status in earlier statements and gave too bullish guidance at an investor and analyst conference in November 2003, which he admitted misled investors.” (Id.) The final alleged disclosure was InterContinental’s announcement that it would be terminating its relationship with IAC Travel. (CC ¶ 90; DC ¶ 104.) . Ultimately, IAC met its earnings projection for 2004, reporting earnings of $1.02 billion, within the range of $1.0 to $1.2 billion forecasted in November 2003. (See Form 8-K, Ex. 99.1, at 1 (Feb. 16, 2005) (DiPrima Aff. Ex. 18).) However, within weeks of the disclosures of August 3, 2004, multiple class action lawsuits alleging securities fraud were filed. The consolidated class action at issue here asserts claims under Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b) (“Section 10(b)”), Rule 10b-5 promulgated thereunder, Section 11 of the Securities Act of 1933 (“Securities Act”), Section 20(a) of the Exchange Act, 15 U.S.C. § 78t(a) (“Section 20(a)”), and Section 15 of the Securities Act, 15 U.S.C. § 77o (“Section 15”). The allegations of wrongdoing in the consolidated derivative suits mirror those in the class action, and derivative plaintiffs assert claims of breach of fiduciary duties, abuse of control, gross mismanagement, waste of corporate assets, unjust enrichment, contribution and indemnification, and violation of Section 14(a) of the Exchange Act. DISCUSSION I. Defendants’ Motion To Dismiss The Class Complaint A. Section 10(b) and Rule 10b-5 Claim Against All Class Action Defendants Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, prohibit fraudulent activities in connection with securities transactions. Section 10(b) prohibits the use of “manipulative or deceptive” practices in connection with the purchase or sale of securities. 15 U.S.C. § 78j(b). Rule 10b-5 presents specific practices that are considered “manipulative or deceptive” and provides that “it shall be unlawful ... to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.” 17 C.F.R. § 240.10b-5(b). To state a claim for securities fraud under Section 10(b) and Rule 10b-5, “a plaintiff must allege that the defendant knowingly or recklessly made a false or misleading statement of material fact in connection with the purchase or sale of a security, upon which plaintiff reasonably relied, proximately causing his injury.” Kowal v. MCI, 16 F.3d 1271, 1276 (D.C.Cir.1994) (footnote omitted); see Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341-342, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (holding that the basic elements of Section 10(b) and Rule 10b-5 claims are “(1) a material misrepresentation (or omission); (2) scienter, i.e., a wrongful state of mind; (3) a connection with the purchase or sale of a security; (4) reliance, often referred to in cases involving public securities markets (fraud-on-the-market cases) as ‘transaction causation,’; (5) economic loss; and (6) ‘loss causation,’ i.e., a causal connection between the material misrepresentation and the loss” (internal citations omitted)). A court may not dismiss a complaint under Rule 12(b)(6) “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Bernheim v. Lift, 79 F.3d 318 (2d Cir.1996) (internal quotation marks omitted). At the motion-to-dismiss stage, the proper question “is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Jackson v. Birmingham Bd. of Educ., 544 U.S. 167, 184, 125 S.Ct. 1497, 161 L.Ed.2d 361 (2005) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). A court “must accept as true all well-pleaded factual allegations in the complaint and draw all reasonable inferences in favor of the non-moving party.” SEC v. PIMCO Advisors Fund Mgmt., LLC, 341 F.Supp.2d 454, 463 (S.D.N.Y.2004) (citing Sec. Investor Prot. Corp. v. BDO Seidman, LLP, 222 F.3d 63, 68 (2d Cir.2000)). However, the court will not credit conclusory statements unsupported by factual allegations or legal conclusions presented as factual allegations. Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); J.S. Serv. Ctr. Corp. v. General Elec. Tech. Servs. Co., 937 F.Supp. 216, 219 (S.D.N.Y.1996). Nor should a court accept allegations that are contradicted or undermined by other more specific allegations in the complaint or by written materials properly before the court. Madonna v. United States, 878 F.2d 62, 65-66 (2d Cir.1989); Alusit Ltd. v. Aluglas of Pa., No. 89 Civ. 3849(CSH), 1990 U.S. Dist. LEXIS 16755, 1990 WL 209422 at *11 & n. 1 (S.D.N.Y. Dec.4, 1990). Materials that a court may properly consider on a motion to dismiss include any written instrument attached to [the complaint] as an exhibit or any statements or documents incorporated in it by reference, as well as public disclosure documents required by law to be, and that have been, filed with the SEC, and documents that the plaintiffs either possessed or knew about and upon which they relied in bringing the suit. Rothman v. Gregor, 220 F.3d 81, 88 (2d Cir.2000) (citing Cosmas v. Hassett, 886 F.2d 8, 13 (2d Cir.1989), Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir.1991), Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir.1991)). While the rules of pleading in federal court usually require only “a short and plain statement” of the plaintiffs claim for relief, Fed. R. Civ. Proc. 8, aver-ments of fraud must be “stated with particularity,” Fed. R. Civ. Proc. 9(b). In securities cases where the plaintiff alleges that a defendant made an untrue statement of a material fact or omitted to state a material fact, the Private Securities Litigation Reform Act of 1995 (“PSLRA”) imposes additional pleading requirements: the complaint must “specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.” 15 U.S.C. § 78u-4(b)(1). “The Second Circuit evaluates a securities complaint’s compliance with Rule 9(b) and the PSLRA by means of a common formulation. ‘A complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.’ ” In re Marsh & McLennan Companies, Inc. Sec. Litig., No. 04 Civ. 8144(SWK), 2006 U.S. Dist. LEXIS 49525, 2006 WL 2057194, at *8 (S.D.N.Y. July 20, 2006) (quoting Stevelman v. Alias Research Inc., 174 F.3d 79, 84 (2d Cir.1999)). Additionally, where “proof that the defendant acted with a particular state of mind” is at issue, the PSLRA requires that the complaint “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2). “[CJlaims that fail to satisfy these PSLRA pleading requirements must be dismissed.” In re AOL Time Warner Sec. & “ERISA” Litig., 381 F.Supp.2d 192, 213 (S.D.N.Y.2004); See 15 U.S.C. § 78u-4(b)(3)(A). The PSLRA also imposes a mandatory stay on discovery pending judicial determination of the legal sufficiency of the claims. See 15 U.S.C. § 78u-4(b)(3)(B). 1. False and Misleading Statements As an initial matter, the Court rejects any claim that IAC’s earnings projection for 2004 of “$1.0 billion to $1.2 billion” was false or misleading or that defendants are liable because IAC failed to meet earnings projections. Although plaintiffs do not squarely allege that IAC’s earnings guidance was fraudulent, plaintiffs complain that IAC “gave too bullish guidance at an investor and analyst conference in November 2003” (CC ¶ 7) and attempted “to assure investors of IAC’s value and performance and continued substantial growth” while at the same time concealing adverse information (CC ¶ 112). However, IAC’s statements about its prospective performance were accompanied by cautionary language. “Such language brings into play the ‘bespeaks caution’ doctrine. Under the ‘bespeaks caution’ doctrine, ‘courts have held that meaningful cautionary language can render omissions or misrepresentations immaterial.’ ” In re Duane Reade Inc. Sec. Litig., No. 02 Civ. 6478(NRB), 2003 U.S. Dist. LEXIS 21319, 2003 WL 22801416, at *5 (S.D.N.Y. Nov.25, 2003) (quoting In re Donald Trump Casino Sec. Litig., 7 F.3d 357, 371 (3d Cir.1993)). The PSLRA also provides safe harbor protection to a forward-looking statement if it is “accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement.” See 15 U.S.C. § 78u-5(c)(l)(A). “The only exception to this rule is that there may be liability where (1) the forward-looking statement was made with actual knowledge that it was false; or (2) where the forward-looking statement misrepresents present facts.” Duane Reade, 2003 WL 22801416, at *5 (citing In re Oxford Health Plans, Inc., 187 F.R.D. 133, 141 (S.D.N.Y.1999)); see In re International Business Machines Corp. Sec. Litig., 163 F.3d 102, 107 (2d Cir.1998) (“Statements regarding projections of future performance may be actionable ... if the speaker [did] not genuinely or reasonably believe them” at the time they were made, (citations omitted)). Plaintiffs have not alleged that defendants issued the earnings guidance with actual knowledge that it was false or that the guidance itself misrepresented present facts. See Goplen v. 51job, Inc., 453 F.Supp.2d 759 (S.D.N.Y.2006) (“Plaintiffs must show that defendants knew or should have known that the fourth quarter projections were misleading when made.”) Accordingly, the projection may benefit from the PSLRA safe harbor for forward-looking statements so long as defendants also “pointfed] to the principal contingencies that could cause actual results to depart from the projection.” Asher v. Baxter Int’l Inc., 377 F.3d 727, 734 (7th Cir.2004) (cited in In re Gilat Satellite Networks, Ltd., No. 02 Civ. 1510(CPS), 2005 U.S. Dist. LEXIS 41996, 2005 WL 2277476, at *12 (E.D.N.Y. Sept.19, 2005)). IAC did, in fact, couch its earnings projection with specific cautionary language. In the same Form 8-K in which IAC announced its earnings forecast, it disclosed to investors various risk factors, including “competition from others” and “the risk that IAC’s businesses will not be integrated successfully.” (DiPrima Aff. Ex. 6, at 20.) In the conference call following this earnings projection, Diller specifically warned that IAC was feeling more competition from hotel chains, large, medium-sized, and from other online travel sites trying to replicate our success. Travelocity, Orbitz, and from the hotels themselves, are all being competitive, getting smarter about using the Internet, and it’s resulted in, of course, more more [sic] aggressive pricing online and more aggressive marketing trends. (DiPrima Aff. Ex. 7, at 3.) Similarly, when IAC reconfirmed its earning guidance in an analyst conference call on February 9, 2004, Diller said: [W]e are here to reconfirm our range of 1 billion to 1.2 billion in OIBA. We’ve told you our goal is to deliver almost 3 billion by 2008, which is growth of nearly 30% a year. We can’t tell you what’s going to happen in any particular quarter or year, but we do think it’s going to range between 25 and 35%. Now, these crystal ballings aren’t, of course, worth the air they’re written on. No one can predict the future. But it is our honest guess, based upon everything we know. (Tr. Q4 2003 Earnings Call, at 2 (Feb. 9, 2004) (DiPrima Aff. Ex. 11)). The Court finds, therefore, that the cautionary language used in connection with IAC’s earnings guidance renders it inactionable. “The securities laws do not require that investors be treated like children ... investors know that the stock market is a risky business and that when a company’s officer makes predictions ... they are not issuing guarantees.” Duane Reade, 2003 WL 22801416, at *6 (citations and internal quotation marks omitted); see Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1129 (2d Cir.1994) (“[MJisguided optimism is not a cause of action, and does not support an inference of fraud. We have rejected the legitimacy of alleging ‘fraud by hindsight.’ ”); In re Time Warner Inc. Sec. Litig., 9 F.3d 259, 269 (2d Cir.1993) (“There is no suggestion that the factual assertions contained in any of these statements were false when the statements were made. As to the expressions of opinion and' the projections contained in the statements, while not beyond the reach of the securities laws, ... the complaint contains no allegations to support the inference that the defendants either did not have these favorable opinions on future prospects when' they made the statements or that the favorable opinions were without a basis of fact.”). Even if these cautionary statements were insufficient to render the earnings projection immaterial as a matter of law, the fact that IAC reported earnings of $1.02 billion — within the projected range — largely eviscerates any unstated claim that the earnings projection was false or misleading. The Court now turns to the core allegation of the Complaint, which presents the more nuanced claim that the sixteen-percent drop in share price is attributable, not to IAC’s revised earnings projection, but to the disclosure on August 3, 2004, that IAC Travel was having “supply issues.” (CC ¶ 87; See CC Opp’n 13; Oral Argument Tr. 9, Oct. 12, 2006.) Specifically, plaintiffs allege that defendants violated the federal securities laws by misrepresenting current facts, including “IAC’s supply of airplane seats and hotel rooms, [and] its relationships with its suppliers and customers.... ” (CC ¶ 3; CC Opp’n 13.) Under Rule 9(b) and the PSLRA pleading standards, plaintiffs must do more than allege that various statements made by defendants were false or misleading: “they must demonstrate with specificity why and how that is so.” In re Open Joint Stock Co. “Vimpel-Communications” Sec. Li-tig., No. 04 Civ. 9742(NRB), 2006 U.S. Dist. LEXIS 10256, 2006 WL 647981, at *5 (S.D.N.Y. Mar.14, 2006); see Rombach v. Chang, 355 F.3d 164, 174 (2d Cir.2004) (“To succeed on this claim, plaintiffs must do more than say that the statements in the press releases were false and misleading; they must demonstrate with specificity why and how that is so.”). Further, the complaint must establish the materiality of the omissions or misstatements. See Basic Inc. v. Levinson, 485 U.S. 224, 238, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) (“In order to prevail on a Rule 10b-5 claim, a plaintiff must show that the statements were misleading as to a material fact. It is not enough that a statement is false or incomplete, if the misrepresented fact is otherwise insignificant.”). An alleged misrepresentation or omission is material when there is “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” Halperin v. eBanker USA com, Inc., 295 F.3d 352, 357 (2d Cir.2002) (citations omitted). The Court now examines each category of false and misleading statement to determine whether plaintiffs have satisfied this standard. a. Airplane Seats The first category of false or misleading statements alleged by plaintiffs concerns the duration of the founding airlines’ contracts with Hotwire. On September 22, 2003, IAC announced that it would acquire Hotwire for $665 million in cash, but the press release omitted any mention of the type of contracts that Hotwire had with its founding airlines. (CC ¶¶ 65-68.) On November 5, 2003, IAC completed the acquisition. (See Press Release, IAC/In-terActiveCorp, IAC Reports Q3 2003 Results (Nov. 5, 2003) (cited by CC ¶ 69).) On the earnings conference call that same day, an analyst asked Diller what effect the purchase of Hotwire would have on contracts between Hotwire and its founding airlines. The following exchange took place: DARYL SMITH, ANALYST, JP MORGAN: Good morning. On the Hotwire side of the equation, traditionally [sic] benefited from preferential pricing associated with their close connection with airline suppliers. With airlines now liquidating their investment when can we anticipate that their existing pricing contracts roll off and when do you think you’d expect financial impact of that on the business? I have a follow-up question as well. BARRY DILLER: I’m sorry, forgive me. If you just repeat the last part of your questions, cross talk here and I couldn’t hear it. DARYL SMITH, ANALYST, JP MORGAN: If you look at the airlines now liquidating their investment what’s the potential impact on the roll off of that pricing contracts and then what’s the impact on your business and when can we anticipate that happening? BARRY DILLER: I don’t know if there’s any. I think our agreements with airlines are long-term. And, so, I don’t think that it will have any effect. Anybody else here have anything to comment on it? So that’s the answer to that. (DiPrima Aff. Ex. 7, at 11; CC ¶¶ 69-72.) Plaintiffs allege that Diller’s statement that the “agreements with airlines are long-term” was materially false and misleading because “Hotwire did not have the long-term pricing arrangements represented and the subsequent decline in Hotwire’s business would be a major contributing factor in IAC’s declining travel prospects in 2004.” (CC ¶ 73.) Courts in this district require plaintiffs to sufficiently identify the sources of their information and belief “so as to allow each defendant and the Court to review the sources and determine, at the pleading stage, whether an inference of fraud may be fairly drawn from the information contained therein.” G-I Holdings v. Baron & Budd, No. 01 Civ. 0216(RWS), 2004 U.S. Dist. LEXIS 10534, 2004 WL 1277870, at *2 (S.D.N.Y. June 10, 2004) (quoting Crystal v. Foy, No. 80 Civ. 446(LWP), 1981 U.S. Dist. LEXIS 13242, 1981 WL 1648, at *3 (S.D.N.Y. June 30, 1981)) (collecting cases requiring disclosure of the sources of information for fraud pleadings). Therefore, for the instant claim to survive a motion to dismiss, plaintiffs must plead, with particularity, sufficient facts to support plaintiffs’ belief that Hotwire’s pricing arrangements with airlines were not long-term. With seeming indifference to this requirement, plaintiffs have proffered no facts to support this conclusory allegation. Plaintiffs do not purport to possess firsthand knowledge of the terms of the Hotwire contracts; in fact, plaintiffs have disavowed accessing or relying on the contracts, which are not publicly available, in bringing this Complaint. (Mot. Strike 2, 6.) Instead, plaintiffs attempt to support their allegation by citing Clark’s statement on August 3, 2004: [I]f you dig deep into this of course, there are some supply issues, and, of course, the second quarter was probably the deepest cut of it. Certainly internationally where all travel was down and is beginning I think to rebound. But other than that and other than Hotwire, which is definitely a significant issue, we don’t think, again, it’s structural. We don’t think it’s long term. We think that the supply issues that we have had that have given us a lesser discounts as the year progresses, we don’t think it’s going to come back fast, but we definitely think it will come back. (CC ¶ 87 (emphasis added).) Although plaintiffs argue that Clark’s statement is an admission that IAC did not have long-term pricing agreements with airlines, Clark never mentioned the Hotwire contracts, let alone discussed the terms of those contracts. The most that can be inferred from Clark’s statement is that Hotwire was not getting the same discounts on airline seats that it had previously enjoyed and, as a result, consumers were not making as many airline reservations through Hotwire. Plaintiffs also quote an analyst from Oppenheimer & Co. who said following the conference call that IAC’s “longer-term issues are that they are not getting extra inventory or discounted rates from the airlines.” (Id. ¶ 89.) However, this statement provides plaintiffs with no more evidence of the terms of the Hotwire contracts than Clark’s statement. As the Complaint provides no facts to support plaintiffs allegation that defendants “affirmatively misrepresented] and concealed] that IAC lacked long-term contracts with airlines” (id. ¶ 3), the claim does not comply with the pleading standards set forth in Rule 9(b) and the PSLRA and must be dismissed. See Acito v. IMCERA Group, 47 F.3d 47, 53 (2d Cir.1995) (“[C]onclusory allegations of fraud do not satisfy the pleading requirements of Rule 9(b).” (citing Wexner v. First Manhattan Co., 902 F.2d 169, 172 (2d Cir.1990))). b. Hotel Rooms Plaintiffs also allege that certain statements regarding IAC’s relationships with hotel chains and customers were misleading because those statements cast IAC’s hotel business in a positive light, when in fact the “entire supply and demand structure of that segment [was] evaporating.” (CC Opp’n 23-24.) Although the Class Complaint complies with the first three requirements of the PSLRA by specifying the statements that plaintiffs contend were fraudulent, identifying the speaker, and stating where and when the statements were made, the Complaint fails to comply with the fourth requirement of the PSLRA, that the complaint “explain why the statements were fraudulent.” Stevelman, 174 F.3d at 84. Plaintiffs argue that two statements made by defendants regarding IAC’s hotel business were false and misleading. The first statement was made in IAC’s 2002 Form 10-K filed with the SEC on March 31, 2003: Although Hotels.com contracts in advance for volume room commitments, its supply contracts often allow it to return unsold rooms without penalty within a specified period of time. In addition, because Hotels.com contracts to purchase rooms in advance, it is able to manage billing procedures for the rooms it sells and thereby maintains direct relationships with its customers. Hotels.com has developed proprietary revenue management and reservation systems software that is integrated with its websites and call center operations. These systems and software enable Hotels.com to accurately monitor its room inventory and provide prompt, efficient customer service. Hotels.com believes that its supply contracts and revenue management capabilities differentiate it from retail travel agencies and other commission-based resellers of accommodations. (CC ¶ 42.) Plaintiffs likewise claim that the following statement made by Diller on the earnings release conference call on February 9, 2004, was false and misleading: [W]e believe we can [grow] travel at our stated rates while being good partners to our suppliers and giving the best experience and service to our consumers. It’s really true that we [bring] new customers to our suppliers. And one of our big objectives this year is to have all of our supply partners realize that and for us to really work to smooth out every working relationship that we have. We’ve announced an agreement with Marriott last week to distribute their hotels through our merchant program on both Expedia and hotels.com. We now have deals with the five major hotel chains, as well as thousands of different independent hotels and smaller chain operators. (CC ¶ 78.) The first statement expresses defendants’ belief that its supply contracts and software helped it “accurately monitor its room inventory and provide prompt, efficient customer service,” and the second expresses defendants’ hope that they can continue to grow the travel business “while being good partners to our suppliers and giving the best experience and service to our consumers.” Plaintiffs do not argue that these “ ‘[s]oft,’ ‘puffing’ statements,’ ” Raab v. General Physics Corp., 4 F.3d 286, 289 (4th Cir.1993), are actionable by themselves. See Shields, 25 F.3d at 1129-30 (2d Cir.1994) (“People in charge of an enterprise are not required to take a gloomy, fearful or defeatist view of the future; subject to what current data indicates, they can be expected to be confident about their stewardship and the prospects of the business that they manage.” (quoted in Rombach, 355 F.3d at 174)). Instead, plaintiffs argue that by making positive, albeit true, statements regarding Hotels.com, defendants assumed an obligation to disclose negative information about supplier and customer dissatisfaction as well. (Oral Argument Tr. 31-32, Oct. 12, 2006; CC ¶¶ 9(a), 97(a) (“The Company’s entire travel sector was in jeopardy and experiencing multiple negative trends that were clearly contrary to defendants’ statements about the direction of the business.... ”)). There is ample authority for the proposition that otherwise true, positive statements are rendered misleading when a corporation withholds negative information that would be material to an investor-. See, e.g., Rombach, 355 F.3d at 173 (“The touchstone of the inquiry is not whether isolated statements within a document were true, but whether defendants’ representations or omissions, considered together and in context, would affect the total mix of information and thereby mislead a reasonable investor regarding the nature of the securities offered.”) (quoting Halperin v. eBanker USA.com, Inc., 295 F.3d 352, 357 (2d Cir.2002)); McMahan & Co. v. Wherehouse Entm’t, Inc., 900 F.2d 576, 579 (2d Cir.1990) (“[S]ome statements, although literally accurate, can become, through their context and manner of presentation, devices which mislead investors. For that reason, the disclosure required by the securities laws is measured not by literal truth, but by the ability of the material to accurately inform rather than mislead prospective buyers.”); Fogarazzo v. Lehman Bros., 341 F.Supp.2d 274, 294 (S.D.N.Y.2004) (“A statement can also be misleading, though not technically false, if it amounts to a half-truth by omitting some material fact.”). It is not enough, however, for plaintiffs to merely allege that defendants withheld negative information from the market; as discussed above, “whenever plaintiffs allege, on information and belief, that defendants made material misstatements or omissions, the complaint must ‘state with particularity all facts on which that belief is formed.’ ” Novak v. Kasaks, 216 F.3d 300, 306 (2d Cir.2000) (quoting the PSLRA, 15 U.S.C. § 78u-4(b)(1)). Here, the Class Complaint sets forth allegations regarding the “bad business practices” (CC ¶¶ 9(a), 97(a)) described above, such as double-billing and overcharging customers, holding up payment to hotel chains, and representing hotels as “sold out” when they were not. In order to survive at this stage, the Class Complaint must state with particularity sufficient facts to support the belief that these practices were in fact placing the “entire travel sector ... in jeopardy” (id.), and accordingly that defendants’ positive public statements concerning IAC’s relationships with hotel chains and customers were false and misleading. See Novak, 216 F.3d at 312. The Second Circuit has stated that the PSLRA does not require a plaintiff to reveal confidential sources at the pleading stage, so long as the complaint describes the documentary or personal sources on which it relies with enough detail for a court to determine whether the plaintiff has “an adequate basis for believing that defendants’ statements were false.” Novak, 216 F.3d at 314; cf. In re Philip Servs. Corp. Sec. Litig., 383 F.Supp.2d 463, 478-480 (S.D.N.Y.2004) (rejecting efforts by district courts to read the PSLRA “as importing an evidentiary requirement into securities fraud complaints,” approving instead “an evaluation, inter alia, of the level of detail provided by the confidential sources, the corroborative nature of the other facts alleged (including from other sources), the coherence and plausibility of the allegations, the number of sources, the reliability of the sources, and similar indicia” (quotation omitted)). Here, the Class Complaint does not provide specific facts concerning the majority of the alleged bad business practices for the Court to ascertain whether plaintiffs have an adequate basis for alleging that “IAC’s relationship with its hotel suppliers — and thus its ability to secure a supply of hotel rooms to sell — completely fell apart before and during the Class Period.” (CC Opp’n 5.) The Complaint states that information regarding the bad business practices was gathered from unidentified “former IAC employees” and “plaintiffs’ counsel’s investigation.” (CC ¶¶ 9(a), 9(c), 43(i), 97(a), 97(c).) The allegations attributed to former employees are stated in the most general of terms (see, e.g., id. ¶¶ 9(a) (“online customers were being double-billed,” “[cjertain hotel chains were contesting the Company’s slow payment,” “there were large numbers of unhappy consumers who felt they had been over-billed in one way or another”)), without names, dates, places, or other details that might help the Court evaluate whether these employees were actually in a position to know the status of IAC Travel’s relationships with hotel chains and customers. Moreover, the bulk of the allegations are uncorroborated by other facts. For example, plaintiffs have alleged no facts that might corroborate the statements of unidentified former employees that defendants double-billed and overcharged customers, held up payment to hotel chains, or charged rates for hotel rooms that exceeded the hotel’s public prices. (See id. ¶¶ 9, 43, 97.) The one specified allegation of bad business practices related to the termination of IAC’s relationship with InterContinental Hotels Group. InterContinental publicly complained that Expedia and Hotels.com represented hotels as “sold out” when they were not, and that Expedia and Hotels.com transmitted reservations via fax rather than “guarantee[ing] through an automated and common confirmation process.” (Compare id. ¶¶ 80, 90 (InterContinental’s complaints) with id. ¶¶ 9, 43, 97 (bad business practices).) The discontent of one hotel chain, however, is hardly evidence that the “entire supply and demand structure of that segment [was] evaporating.” Significantly, plaintiffs have not attempted to quantify the impact that InterContinental’s dissatisfaction had on IAC Travel’s profitability during the class period. Further, the Class Complaint itself acknowledges that at the same time that IAC was losing InterContinental’s business, it was forging relationships with new suppliers, such as Marriott and Hyatt. {See id. ¶¶ 78, 81.) The loss of one hotel chain, without more, is “consistent with unremarkable circumstances' short of financial peril or instability.” Rombach, 355 F.3d at 173-74. “A company that operates ... nationwide is bound to have problems assimilating this or that property, to have disputes over payments with vendors and landlords, and to have some bills unpaid by reason of contested amounts or spot episodes of illiquidity; the allegations in the complaint are consistent with unremarkable circumstances short of financial peril or instability.” Id. at 173 (affirming dismissal of Sections 10(b), 11, and 12 claims); see In re JP Morgan Chase Sec. Litig., 363 F.Supp.2d 595, 625-26 (S.D.N.Y.2005) (“[T]he materiality of the alleged misstatements or omissions cannot be pled in a conclusory or general fashion”). The Class Complaint also alleges that Diller minimized the significance of the occupancy tax issue, and its affect on IAC’s relationships with hotel suppliers, by making two false and misleading statements. (CC ¶ 101; see also id. ¶¶ 60-64.) First, in a press release issued on August 11, 2003 — shortly after an article about the occupancy tax issue appeared in the New York Times, and nearly a year before the close of the class period — Diller said that “while a limited number of jurisdictions have raised this issue (and the companies are engaged in ongoing dialogue with those jurisdictions), there is simply no basis for the supposition that the companies will face liability in all jurisdictions.” {id. ¶ 61.) Second, an article in the Calgary Herald quoted Diller as saying that IAC “has investigated every aspect” of the tax issue and has “taken an appropriate reserve of $12 million. We think that’s adequate.” (CC ¶ 62.) According to plaintiffs, however, the situation was much more dire, because, “[a]s opposed to the ‘limited number of jurisdictions’ which IAC claimed had raised the issue, IAC was facing the issue nationally.” (CC ¶ 64.) Given IAC’s regular, meaningful, and specific warnings regarding the issue, however, no reasonable investor could have been misled by Diller’s two statements. For example, IAC’s Form 10-K for 2002 gave a detailed, multi-paragraph warning to investors, stating in part: Some tax authorities may assert that in some circumstances USA [IAC’s previous name] or its subsidiaries should collect and remit taxes on that part of their charges to customers which represents compensation for booking services. The amount of any tax liability to USA and its subsidiaries on account of this issue would depend on the number of jurisdictions that prevail in assessing such additional tax. Expedia and Hotels.com have not paid nor agreed to pay such taxes and intend to defend their positions vigorously. Should a jurisdiction prevail on such a claim, USA’s subsidiaries may consider limiting liability for future transactions in that jurisdiction by passing on such taxes to the consumer. (Form 10-K, at 28 (Mar. 31, 2003) (DiPri-ma Aff. Ex. 10).) Similarly, IAC’s Form 10-K for 2003 included an even more explicit warning, that stated in part: A variety of factors could affect the amount of the liability (both past and future).... IAC notes that there are more than 7,000 taxing jurisdictions, and it is not feasible to analyze the statutes, regulations and judicial and administrative rulings in every jurisdiction. Rather, IACT has obtained the advice of state and local tax experts with respect to tax laws of certain states and local jurisdictions that represent a large portion of IACT’s hotel revenue. In addition, IACT continues to engage in a dialog with and receive feedback from certain state and local tax authorities. IAC will continue to monitor the issue closely and provide additional disclosure, as well as adjust the level of reserves, as developments warrant. The reserve balance at December 31, 2003 is $13.2 million as compared to $10.4 million at December 31, 2002. (Form 10-K, at 69 (Mar. 15, 2004).) Because IAC repeatedly warned the public that taxing authorities could force IAC to pay back taxes or pay more taxes in the future, further disclosure would not have “significantly altered the total mix of information made available.” Acito, 47 F.3d at 52 (quotation omitted). Moreover, the Class Complaint is silent as to how IAC’s decision to remit tax on the wholesale price it paid for rooms, rather than on the full retail price paid by customers, contributed to the deterioration of its relationships with hotel chains or customers. Although the Complaint advances other alleged misstatements (CC ¶¶ 44-48, 53, 56, 57-59, 74), none of these are accompanied by particularized facts explaining-why plaintiffs believe that the statements were fraudulent. See, e.g., CC ¶ 44 (“We are convinced that this merger [with IAC] will enhance the growth prospects for Hotels.com....”); CC ¶45 (“[W]e had a great quarter. Travel revenue was up 93% and EBITDA for travel was up 86% over last year. This is despite the war which affected bookings in March and early April.”); CC ¶ 57 (“Our quarter was really very strong, led by the travel and electronic retail. Travel continues to be our big growth engine.”); CC ¶ 75 (“We are investing very aggressively into the growth of the business.”); CC ¶ 78 (“We think that nothing can replace a broad travel site omnibus choice, convenience, and ability to sell packages and multiple components.”). In this respect, the Class Complaint clearly fails to plead with the particularity required by Rule 9(b) and the PSLRA. Moreover, many of the statements merely cite historical facts or express optimism regarding IAC’s future performance and as such are not actionable under the securities laws. See Rombach, 355 F.3d at 174 (holding that “expressions of puffery and corporate optimism do not give rise to securities violations”); San Leandro Emergency Medical Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 811 (2d Cir.1996) (holding that puffery is not actionable under the securities laws); Duane Reade, 2003 WL 22801416, at *6, aff'd Nadoff v. Duane Reade, Inc., 107 Fed.Appx. 250, 252 (2d Cir.2004) (holding that accurate statements about past performance are not actionable under the securities laws). Finally, it is worth noting that IAC Travel’s financial results are in tension with the allegation that the supply structure was “evaporating.” The Class Complaint itself quotes from a press release summarizing the growth of both IAC and its travel division in the second quarter of 2004, as reported by IAC in its Form 8-K filed on August 3, 2004: “IAC Travel (“IACT”) increased revenue on a comparable net basis by 34% to $556 million, operating income by 46% to $129 million and Operating Income Before Amortization by 29% to $171 million .... ” (CC ¶ 86 (emphasis added).) IAC Travel enjoyed steady growth after the class period, reporting OIBA growth of 27% in third quarter of 2004, compared to third quarter of 2003 {See Form 8-K, Ex. 99.1, at 2 (Nov. 3, 2004)); 3% in fourth quarter of 2004, compared to fourth quarter of 2003 {See Form 8-K, Ex. 99.1, at 2 (Feb. 16, 2005) (DiPri-ma Aff. Ex. 18)); and 32% in first quarter of 2005, compared to first quarter of 2004 (See Form 8-K, Ex. 99.1, at 2 (May 4, 2005)). Given these financial results, it is perhaps not surprising that plaintiffs were unable to muster particularized facts in the Class Complaint to support their theory that the “entire travel sector was in jeopardy.” In sum, the Court finds that plaintiffs’ allegations do not sufficiently explain how any of the statements made by de