Full opinion text
MEMORANDUM OF LAW & ORDER MICHAEL J. DAVIS, District Judge. I. INTRODUCTION This matter is before the Court on Defendants’ Amended Motion to Dismiss. [Docket No. 45] The Court heard oral argument on March 9, 2007. II. BACKGROUND A. Factual Background 1. Parties NVE Corporation (“NVE”) is a Minnesota-based corporation that specializes in spintronics, nanotechnology used to store information using electron spin. (Am. CompLIffl 12, 28.) At all relevant times, NVE was listed and actively traded on the NASDAQ. (Id. ¶ 174(a).) NVE licenses intellectual property, such as Magnetic Random Access Memories (“MRAM”) technology, and sells spintronic products. (Id. ¶¶ 12, 28.) NVE licensed its MRAM patents to other companies including Cypress Semiconductor Corporation (“Cypress”) and Motorola, Inc. (“Motorola”). (Id. ¶ 3.) Cypress’s wholly-owned subsidiary, Silicon Magnetic Systems (“SMS”), was formed to pursue MRAM development. (Id. ¶ 42.) NVE disclosed in its SEC filings that, when it formed its relationship with Cypress and SMS in 2002, it was dependent on its licensees, particularly Cypress and Motorola, to convert NVE’s intellectual property into commercially viable MRAM. (Id. ¶ 43.) Currently before the Court is a purported securities fraud class action lawsuit brought on behalf of all persons who purchased or acquired NVE securities during the period of May 16, 2003 through April 19, 2005. Generally, Plaintiffs claim that, during the Class Period, NVE’s CEO, President, and Director, Daniel A. Baker; NVE’s Chief Technology Officer and Director, James M. Daughton; and NVE Director, Jeffrey K. Kaszubinski (collectively “Individual Defendants”); and NVE issued a series of false and misleading statements regarding the development of MRAM, which supposedly had the potential to combine the speed of semiconductor memory with the non-volatility of magnetic desk drives and could eventually replace conventional memories. (Am.Compl^ 2.) Plaintiffs assert that, in fact, NVE’s MRAM technology did not constitute a breakthrough, that it was not being used in Cypress’s and SMS’s MRAM technology, that Cypress and SMS were many years away from developing a production-ready MRAM product that could be successfully commercialized, and that NVE’s MRAM patents were immaterial and unenforceable. (Id. ¶¶ 6, 51.) During the Class Period, Daughton served on the Board of Directors of SMS. (Am.Compl^ 14.) During the Class Period, Kaszubinski served as President, CEO, and Director of SMS. (Id. ¶ 15.) 2. Defendants’ Statements The Class Period begins on May 16, 2003, when NVE filed its 2003 Annual Report on SEC Form 10-KSB, which, among other things, discussed the April 2002 technology exchange agreement between NVE and Cypress and stated that Cypress had announced plans to have MRAMs in production by the end of calendar year 2003. (Am.Compl^ 101.) Altogether, Plaintiffs allege twenty groups of false or misleading statements. (Am.Compl.lffl 101, 105, 107, 111, 113, 115, 118, 122, 126, 129, 134, 136, 138, 141, 143, 146,148,153,157,159.) 3. Decline in Stock Prices On February 14, 2005, Cypress issued a press release revealing that it would divest SMS because it concluded that MRAM could only be “a niche technology with higher bit pricing than that of SRAM.” (Am.Compl^ 164.) Plaintiffs allege that, after this announcement, NVE’s common stock price fell from $28.36 per share on February 11, 2005, to $25.98 on February 14, 2005, and to $17.04 per share on April 19, 2005, when NVE issued a press release stating that it would focus on licensing its MRAM intellectual property and no longer seek to sell MRAM devices. (Id. ¶¶ 5,165, 169.) NVE’s stock price continued to fall until it closed at $14.85 per share on April 20, 2005. (Id. ¶ 170.) NVE continues to exist and to attempt to develop MRAM technology, although it has achieved profitability by manufacturing less complicated spintronic chips. (Id. ¶ 173.) 4.Problems with MRAM Technology Plaintiffs allege that NVE had problems with its MRAM patents and with MRAM technology development. In Paragraphs 49 through 61 of the Amended Complaint, Plaintiffs allege that NVE’s patents do not cover the inventions used to create magnetic or spin memory cells, which is the technology that makes MRAM chips possible. (Am.Compl^ 56). They claim that NVE’s MRAM patents are preceded by prior art by Motorola and IBM. (Id. ¶ 58.) They conclude that NVE’s MRAM intellectual property is “unenforceable and immaterial.” (Id. ¶ 61.) There is no allegation that the Patent Office or any court has found the patents unenforceable, that there has been any litigation regarding this allegation, or that any other patent holders have alleged this. In Paragraphs 62 though 100 of the Amended Complaint, Plaintiffs allege that SMS “experienced significant, if not insurmountable difficulties with the development of commercially viable MRAM technology from the initiation of its MRAM project right up to the point when Cypress announced in February 2005 that it was abandoning the SMS [] MRAM project and divesting its SMS subsidiary.” (Am. Comply 62.) The main technological development issue was termed the “blinky bits” problem. Plaintiffs allege that when the engineers “would test the data placed on the memory, it was supposed to stay in one spot on the device. However, because of the design, the data would not stay where it was supposed to, and it was dubbed ‘blinky.’ ” (Am. Compl. ¶ 87; see also ¶¶ 82, 87, 98, 103.) Confidential Source No. 7 stated that this problem occurred in mid-to-late 2002 and “led to questions about the ability to obtain a good yield.” (Id. ¶ 87.) By 2004, “SMS was able to yield approximately 70% die [viable chips] from one wafer.” (Id. ¶ 98.) Confidential Source No. 7 also stated that SMS was “burning money” when fewer than 80% to 90% of the die created from one wafer were “good.” (Id. ¶ 87.) Finally, SMS was able to “run 16 million cycles and there was no sign of the chip going ‘blinky.’ [Confidential Source No. 10, Director of Technology Development at SMS] said that with the reliability problems SMS was having, it may have worked one more cycle and then blinked.” (Id. ¶ 98.) According to Confidential Source No. 10, “it was the ‘blinky bits’ problems that SMS had worked for years to correct that ultimately let to Cypress abandoning MRAM and SMS’s demise.” (Id. ¶ 103.) However, this source also opined that the MRAM “technology would eventually work.” (Id. ¶ 96.) Confidential Source No. 10 admitted that SMS did send “proof of concept” MRAM samples to several customers between November 2004 and January 2005 and received positive feedback. (Am. Compl. ¶ 99.) However, he asserts that the customers only ran tens of thousands of cycles on the MRAM, which was not sufficient to encounter the blinky bits problem. (Id.) 5. Claims in Amended Complaint The Amended Complaint alleges that all Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and that the Individual Defendants, as controlling persons of NVE, also violated Section 20(a) of the Exchange Act, all by disseminating false and misleading information about NVE, which artificially inflated its stock price. B. Procedural Background On February 10, 2006, Plaintiff Carole Kops filed a class action complaint against NVE, Baker, Daughton, and Kaszubinski. On July 17, 2006, the Court consolidated Kops’ case with two other similar cases and appointed Lead Plaintiffs and Lead Counsel. On September 18, 2006, Plaintiffs filed the Amended Consolidated Class Action Complaint. Defendants NVE, Baker, and Daughton now move to dismiss the entire Amended Complaint with prejudice. III. DISCUSSION A. Standard The Court will only grant a motion to dismiss “if the plaintiffs cannot prove any set of facts which would entitle them to the relief requested.” In re K-tel Int’l, Inc. Sec. Litig., 300 F.3d 881, 888-89 (8th Cir. 2002) (citation omitted). The Court “construe[s] the complaint liberally, taking all factual allegations as true, but rejecting conclusory or catch-all assertions of law and unwarranted inferences.” Id. at 889 (citation omitted). “When deciding a motion to dismiss, a court may consider the complaint and documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading.” Kushner v. Beverly Enters., Inc., 317 F.3d 820, 831 (8th Cir.2003) (citation omitted). The Court can consider SEC filings that were required by law to be filed and are not offered to prove the truth of their contents. Id. at 832. In this case, the relevant SEC filings are excerpted in the Amended Complaint, so it is appropriate for the Court to examine them on this motion to dismiss. The Private Securities Litigation Reform Act (“PSLRA”) provides “special heightened pleading rules” for securities cases such as this one. Id. at 824. In order to proceed on claims brought pursuant to section 10(b) and Rule lob-5, the Class is required to show four elements: (1) misrepresentations or omissions of material fact or acts that operated as a fraud or deceit in violation of the rule; (2) causation, often analyzed in terms of materiality and reliance; (3) scienter on the part of the defendants; and (4) economic harm caused by the fraudulent activity occurring in connection with the purchase and sale of a security. In re K-tel Inti, Inc. Sec. Litig., 300 F.3d at 888 (citations omitted). Under the Reform Act the complaint must also ‘specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation ... is made on information and belief, the complaint shall state with particularity all facts on which the belief is formed.’ 15 U.S.C. § 78u-4(b)(l). In addition, the Reform Act requires ‘with respect to each act or omission alleged’ that a complaint must ‘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). These pleading standards, unique to securities cases, were an attempt to restrain securities fraud litigation abuses such as the practice of pleading by hindsight. Id. at 889 (citation omitted). B. Whether Plaintiffs Adequately Plead Misrepresentations or Omissions with Particularity 1. Whether Plaintiffs Identify Specific Statements as False or Misleading Defendants assert that the statements identified by Plaintiffs are not misleading or false or are not specifically identified. As an example of Plaintiffs’ failure to specify false or misleading statements, Defendants point to Paragraph 107 of the Amended Complaint, in which Plaintiffs quote four paragraphs from an August 2003 press release, but do not identify which statement, in particular, was false or misleading. (Id. ¶¶ 107-08.) Defendants are correct that, throughout the Amended Complaint, Plaintiffs quote large portions of announcements and interviews and do not address the majority of these statements. Plaintiffs only address the falsity or misleading nature of the portions of the statements in bold. The Court interprets the Amended Complaint to only allege that the statements in bold are the allegedly actionable statements. To the extent that Plaintiffs intended to base their claims on the entire quotations, the non-bold portions of the quotations are dismissed for failure to specify why those portions of the statements are misleading. Defendants argue that Plaintiffs admit that many of the statements upon which Plaintiffs’ claims are based are not actionable because they are literally true, are forward-looking, or are statements of facts that are not controversial. As an example of a statement that is not literally false, Defendants point to Paragraph 101, in which Plaintiffs quote NVE’s May 16, 2003, Form 10-KSB. Plaintiffs assert that the statements concerning Cypress announcing plans to produce MRAM by the end of 2003 were misleading because Defendants knew that Cypress was years away from developing successful commercial production of MRAM. (Am. Comply 102.) However, Plaintiffs do not allege that Cypress had not, in fact, announced such plans. (Id.) Plaintiffs admit that, with regard to Defendants’ statement in Paragraph 101, Cypress did make that announcement, so the statement was not literally false; however, they argue that the statement was still misleading. [E]ven absent a duty to speak, a party who discloses material facts in connection with securities transactions assume[s] a duty to speak fully and truthfully on those subjects. However, the requirement is not to dump all known information with every public announcement, but the law requires an actor to provide complete and non-misleading information with respect to the subjects on which he undertakes to speak. In re K-tel Int’l, Inc. Sec. Litig., 300 F.3d 881, 898 (8th Cir.2002) (citations omitted). “[T]he central issue ... is not whether the particular statements, taken separately, were literally true, but whether defendants’ representations, taken together and in context, would have misled a reasonable investor.” In re Stellent, Inc. Sec. Litig., 326 F.Supp.2d 970, 985 (D.Minn.2004). Thus, Plaintiffs argue that once Defendants chose to speak regarding Cypress’s MRAM announcements, they had an affirmative duty to speak the whole truth and disclose that Cypress’s goal was unrealistic. Plaintiffs assert that statements regarding Cypress’s announcements suggested that Cypress and SMS were close to production of economically viable and marketable MRAM devices and NVE was close to commercialization of the same. Plaintiffs argue that, in fact, Defendants knew that MRAM was not working at the time the statements were made. (See Am. Compl. ¶¶ 74, 103 (recounting Principal Engineer’s opinion that “prevailing thought at SMS” was that “MRAM was not working” from December 2000 through December 2003 and that it would be difficult, although not impossible, to reach commercial production).) Plaintiffs claim that progress on development was not sufficient. This assertion is based primarily on the “blinky bits” problems beginning in 2002 that caused serious concerns about reliability of the yield and were not corrected throughout the Class Period. (Id. ¶¶ 81-82, 87, 98, 103.) The Court agrees that, if Cypress’s announcement was false, and Defendants knew of, or had the requisite scienter with regard to, its falsity, then Plaintiffs have sufficiently alleged that the statement was false, regardless of the fact that the statement that Cypress had made such an announcement was technically true. The Court addresses the sufficiency of Plaintiffs’ identification of each statement as false in its Conclusion analyzing each alleged statement. 2. Whether Plaintiffs’ Confidential Witness Allegations Are Sufficient Plaintiffs rely on allegations from a number of confidential sources in the Amended Complaint. When a PSLRAgoverned complaint relies on confidential sources, the sources do not need to be named if the complaint “provid[es] sufficient documentary evidence and/or a sufficient description of the personal sources of the plaintiffs beliefs.” Cal. Pub. Employees’ Ret. Sys. v. Chubb Corp., 394 F.3d 126, 147 (3d Cir.2004). In order to determine if the particularity requirement is met, a court must conduct “an examination of the detail provided by the confidential sources, the sources’ basis of knowledge, the reliability of the sources, the corroborative nature of other facts alleged, including from other sources, the coherence and plausibility of the allegations, and similar indicia.” Id.; see also Fla. State Bd. of Admin. v. Green Tree Fin. Corp., 270 F.3d 645, 668 (8th Cir.2001) (holding that plaintiffs did not need to name confidential informant and that allegations regarding confidential information were sufficient because the complaint “recites details of a particular conversation with a particular person”). Plaintiffs assert that they have adequately described their confidential sources. They claim that the allegations are based on information provided by twelve present or former NVE, Cypress, and SMS employees. They have provided that each source worked at one of the three companies during the Class Period, except Confidential Source No. 9, who was laid off on October 15, 2001. (See Am. Compl. ¶ 93.) The Amended Complaint provides descriptions of the sources’ job titles and sometimes explains their job responsibilities. Plaintiffs claim that the sources’ statements are corroborated by each other and by other facts. See In re Cabletron Sys., Inc., 311 F.3d 11, 31 (1st Cir.2002) (holding confidential source allegations were sufficient when fraud allegations were specific and provided by sources with personal knowledge, and sources’ accounts were corroborated by other sources). Defendants assert that the Amended Complaint contains no precise factual allegations that would allow the confidential sources to proclaim the type of specific facts that would give rise to an inference of fraud. Defendants note that Plaintiffs sometimes provide little information regarding the source’s job. For example, Plaintiffs describe Confidential Source No. 5 as a Process Development Engineer, but do not state for which company he worked, what his job responsibilities were, how he acquired the information, when he acquired the information, or how long he was employed. (Am. Compl. ¶ 105 n. 4.) The Court agrees that his statements that Baker was a “spin doctor” or that “people had taken issue” with Baker’s statements about NVE are too vague to take into account, particularly in light of the scant information on the source and his basis for knowledge. Similarly, Plaintiffs state that Confidential Source No. 12 “worked at NVE from 2001 to 2004 in the Equipment and Building Maintenance Division,” but do not indicate his job title, to whom he reported, or his role and responsibilities within the company. (Id. ¶ 67.) Plaintiffs recount that he heard unidentified NVE employees calling MRAM the “technology of the future that will never happen.” (Id.) His statement is not sufficient because Plaintiffs provide scant description of the source, his position within NVE, or his basis for knowledge. Moreover, he merely recounts an “inside joke” of unidentified NVE employees, without providing any reason for the Court to conclude that these employees had a basis for that particular opinion. Also, the Court disregards the opinion of Confidential Source No. 9 that “MRAM testing at Cypress was not going well.” (Am.CompU 93.) This source ceased working at NVE in October 15, 2001, and the Amended Complaint provides no explanation for the basis for her opinion that the Cypress testing was not going well; nor does it explain when she formed this belief. Defendants also note instances in which witnesses were not employed by or involved with SMS or NVE during the Class Period, or in which sources make comments unrelated to the Class Period. Other confidential sources report hearsay from unidentified sources, discuss events that occurred after they left the company, or make allegations regarding information to which they would not have had access as demonstrated by their job descriptions. Defendants argue that, altogether, the confidential sources offer general descriptions of technological problems that were being experienced on the MRAM project, but do not provide any facts to show the magnitude of the problems. For example, they state that the process was “difficult” and that there were “doubts” regarding whether the MRAM technology would work. (Am.Compl.lffl 67, 69, 74.) They also discuss specific technical issues faced by engineers at SMS, but do not provide facts to show that the problems were insurmountable. (Id. ¶¶ 81-82, 87, 98.) Defendants argue that the development of any new technology faces problems, but that Defendants’ statements regarding MRAM were not misleading unless the problems were significant. Defendants are correct that many of the references to confidential sources are unsupported, irrelevant, or rely on vague hearsay. But some of the statements are specific and matched to relevant job descriptions. The reliability of the confidential sources is taken into account when the Court analyzes each allegedly false or misleading statement at the Conclusion of this Order. For the reasons previously explained, the Court disregards allegations by Confidential Sources 5, 9, and 12. Overall, the Court agrees that the confidential sources fail to allege that the technological development problems with MRAM, particularly the blinky bits problem, were insurmountable barriers to commercial MRAM development. Rather, the confidential source allegations show only that there were technological development difficulties, that some employees considered these problems serious, and that these difficulties delayed successful commercialization. 3. Patent Allegations Defendants assert that Plaintiffs’ patent-related allegations are insufficient. They assert Plaintiffs fail to even adequately allege that NVE’s patents are invalid. Once a patent is issued, it is presumed to be valid and that presumption can only be overcome by clear and convincing evidence. 35 U.S.C. § 282; Medtronic, Inc. v. Daig Corp., 611 F.Supp. 1498, 1507 (D.Minn.1985). Even when there has been a claim against a company’s patent, plaintiffs must allege that the defendants knew their patents were invalid. Here, Plaintiffs merely cite to prior art but fail to even make a prima facie case of patent invalidity. In Gompper v. VISX, Inc., the plaintiffs alleged that the defendants were liable for securities fraud because they made positive statements about the company’s future growth and patent portfolio although they allegedly knew that the patents were invalid. 298 F.3d 893, 895 (9th Cir.2002). The court held, “Though the complaint adequately demonstrates the defendants were unquestionably aware of [the] claim against one of their core patents, in the end it fails to demonstrate the link between awareness of the claim and knowledge that the patents were therefore invalid.” Id. at 895-96 (citations omitted). In this case, Plaintiffs do not allege any claim against NVE’s patents. Additionally, as in Gompper, Plaintiffs have failed to attribute any particular knowledge to Defendants that the patents are invalid. The Court agrees with Defendants and dismisses all of Plaintiffs’ allegations related to the validity of NVE’s patents. Even assuming that Plaintiffs have adequately pled invalidity, which is doubtful, the Amended Complaint lacks sufficient scienter allegations that Defendants were aware of the alleged invalidity of their patents or did not sincerely believe in their validity. C. Whether Plaintiffs Adequately Plead Facts Giving Rise to a Strong Inference of Scienter 1. Standard In order to survive a motion to dismiss, Plaintiffs must “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). The required state of mind is “the intent to deceive, manipulate, or defraud.” Kushner v. Beverly Enters., Inc., 817 F.3d 820, 827 (8th Cir.2003) (citation omitted). In general, inferences of scienter tested under the Reform Act will not survive a motion to dismiss if they are only reasonable inferences — the inferences must be both reasonable and strong. Cases from other circuits suggest that a strong inference of the required scienter may arise where the complaint sufficiently alleges that the defendants (1) benefitted in a concrete and personal way from the purported fraud, (2) engaged in deliberately illegal behavior, (3) knew facts or had access to information suggesting that their public statements were not accurate, or (4) failed to check information they had a duty to monitor. Id. (citations omitted). Plaintiffs can establish scienter in three main ways: by pleading 1) “facts demonstrating a mental state embracing intent to deceive, manipulate, or defraud;” 2) “conduct which rises to the level of severe recklessness” if the plaintiffs allege “highly unreasonable omissions or misrepresentations involving an extreme departure from the standards of ordinary care, and ... presenting] a danger of misleading buyers or sellers which is either known to the defendant or is so obvious that the defendant must have been aware of it;” and 3) allegations of “unusual or heightened motive” and opportunity. In re K-tel Int'l, Inc. Sec. Litig., 300 F.3d 881, 893-94 (8th Cir.2002) (citations omitted). 2. Defendants’ Knowledge of Falsity of Their Statements “One of the classic fact patterns giving rise to a strong inference of scienter is that defendants published statements when they knew facts or had access to information suggesting that their public statements were materially inaccurate.” Fla. State Bd. of Admin. v. Green Tree Fin. Corp., 270 F.3d 645, 665 (8th Cir. 2001). Plaintiffs assert that they have alleged such a fact pattern here. Plaintiffs claim that Cypress’s and SMS’s difficulties with the MRAM project were well known by employees within NVE. (Am. Compl. ¶¶ 67, 75 (recounting general workplace discussion that NVE’s MRAM technology would not work).) However, the Court has already discounted Confidential Source No. 12’s statement regarding workplace opinion. Confidential Source No. 3 recounts that during mid-to-late 2002, “there was open talk among SMS employees” that MRAM technology would not work. (Id. ¶ 75.) However, this allegation does not provide detail about which employees had the opinions or any details to support the basis for their opinions. Nor does either source state that the employees relayed these opinions to the Individual Defendants. Additionally, general difficulties in technology development are part and parcel of any attempt to commercialize new technology. In this case, based on the types of statements made by Defendants, in order to allege that Defendants knew their statements were false, Plaintiffs must allege that Defendants knew the difficulties in MRAM technological development were insurmountable or particularly significant. Knowledge that there were some obstacles to development that SMS was working to resolve or that engineers experienced frustration is not sufficient to show knowledge of falsity. The Court addresses each Individual Defendant’s alleged knowledge in turn. a. Kaszubinski’s Scienter Plaintiffs allege that Kaszubinski attended twice-daily status meetings with SMS employees, including confidential sources, to review the testing results for the day and other MRAM development issues. (Id. ¶¶ 76, 80, 94.) He participated in daily meetings with other employees and also gave weekly progress reports to Cypress personnel on the MRAM project. (Id. ¶¶ 69, 80, 89.) Among other things, “engineer frustrations were presented” at the weekly meetings. (Id. ¶ 69.) Kaszubinski also attended quarterly board meetings and staff meetings every few weeks at which he provided updates on SMS’s work and made comments “about the new wafers, as well as the status and progress of developments.” (Id. ¶ 91.) “[Technical aspects of the MRAM progress” were discussed at meetings with Kaszubinski. (Id. ¶ 92.) These allegations allege daily or twice-daily meetings with Kaszubinski and frequent discussions of test results. However, the confidential sources do not allege that, at these meetings, employees relayed to Kaszubinski that there were insurmountable or significant problems with MRAM development. The Amended Complaint also alleges that Kaszubinski provided information on which Confidential Source No. l’s paper, detailing obstacles to MRAM development, was based and then sent e-mails to the source “indicating the need to discuss the ‘problems’ with the presentation.” (Am. CompLIffl 64-65.) However, the excerpted paper does not state that commercial MRAM production is not possible or that commercial development will take a particular period of time. Rather, it raises questions regarding the cause of the insufficient yield, and, according to the Amended Complaint’s recounting of Kaszubinski’s emails, these were questions with which he did not agree. (See also id. ¶ 72.) Moreover, a confidential source’s statement that Kaszubinski “might have” indicated doubt regarding the MRAM technology or that the source “wouldn’t be surprised if he did” are not the types of allegations that give rise to a strong inference of scienter. (Am.ComplY 75.) The Amended Complaint contains insufficient allegations to give rise to a strong inference of scienter based on Kaszubinski’s knowledge of facts making the allegedly actionable statements materially inaccurate. The Amended Complaint alleges that Kaszubinski had access to details of the technological development of MRAM technology because he was heavily involved in the project. The Court addresses the Individual Defendants’ access to information in subpart d. b. Daughton’s Scienter Confidential sources had regular contact with Daughton (Am.Comp.1ffl 68, 95), and one source thought that Kaszubinski gave weekly MRAM progress reports that Daughton attended (Id. ¶ 69). Among other things, “engineer frustrations were presented” at the weekly meetings. (Id. ¶ 69.) One source reported that Daughton was “often” present at SMS during mid-to-late 2002, when there was “open talk among SMS employees that Daughton’s technology ... would not work.” (Id. ¶ 75.) Another source reported that in 2002 and the first part of 2003, Daughton was present at SMS between two and four times per year. (Id. ¶¶ 84-85.) In 2004 and 2005, Daughton was present at SMS approximately four times per year. (Id. ¶ 80.) Yet another source reported that Daughton was present at SMS up to one time per month. (Id. ¶ 95.) Daughton also attended meetings where SMS reported to Cypress. (Id. ¶ 85.) Another confidential source stated that Baker, Daugh-ton, and Kaszubinski were present at quarterly board meetings and weekly staff meetings where Kaszubinski routinely provided updates on the MRAM project. (Id. ¶ 91.) Also, technical aspects of the MRAM progress were discussed at meetings with engineers, Kaszubinski, Daugh-ton, and Baker. (Id. ¶ 92.) The Amended Complaint contains insufficient allegations to give rise to a strong inference of scienter based on Daughton’s knowledge of facts making the allegedly actionable statements materially inaccurate. There is no allegation that any particular or significant problems with MRAM development were reported to Daughton, beyond engineers’ “frustrations.” As a high-ranking executive, Daughton was somewhat involved in the project, being present at SMS from approximately once a month to twice a year, and participating in some meetings. The Court addresses the Individual Defendants’ access to information in subpart d. c. Baker’s Scienter Baker was present at quarterly board meetings and regular staff meetings every few weeks, during which Kaszubinski would provide updates on SMS’s work. (Am.ComplA 91.) “[Tjechnical aspects of the MRAM progress were discussed in meetings” that Baker attended. (Id. ¶ 92.) The Amended Complaint contains insufficient allegations to give rise to a strong inference of scienter based on Baker’s knowledge of facts making the allegedly actionable statements materially inaccurate. There is no allegation that any particular or significant problems with MRAM development were reported to Baker or that Baker was significantly involved in the MRAM development project. The Court addresses the Individual Defendants’ access to information in subpart d. d. Individual Defendants’ Positions Plaintiffs also assert that NVE’s potential to commercialize MRAM technology was the single most important aspect of NVE’s business and was driving its stock price. (Am.Compl.1ffl 136, 173.) Although persons’ positions within a company cannot alone establish scienter, Plaintiffs note that the fact that a person is “the most senior executive of the Company is a fact relevant in ... weighing of the totality of the allegations.” Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1106 (10th Cir. 2003). The Court takes into consideration that all three Individual Defendants were high-ranking executives: Baker was NVE’s CEO, President, and Director. Daughton was NVE’s Chief Technology Officer and Director; he was also on the Board of Directors of SMS. Kaszubinski was an NVE Director, as well as President, CEO, and Director of SMS. Their positions weigh in favor of Plaintiffs in the Court’s analysis of Plaintiffs’ scienter pleadings. However, the Individual Defendants’ high-ranking positions and attendance at meetings do not alone create a strong inference of scienter. See Goplen v. 51job, Inc., 453 F.Supp.2d 759, 768, 768 n. 8 (S.D.N.Y.2006) (holding that person’s position within company and alleged “attendance at management and Board of Directors meetings” does not create strong inference of scienter). Allegations that the Individual Defendants were aware of technological difficulties regarding MRAM development simply because they were sometimes physically present at SMS are insufficient. “Where plaintiffs contend defendants had access to contrary facts, they must specifically identify the reports or statements containing this information.” Novak v. Kasaks, 216 F.3d 300, 309 (2d Cir.2000) (citation omitted), disagreed with on other grounds In re Navarre Corp. Sec. Litig., 299 F.3d 735 (8th Cir.2002). See also In re Vantive Corp. Sec. Litig., 283 F.3d 1079, 1087-88 (9th Cir.2002) (holding allegations that defendants attended “management and board meetings” and read various financial reports “comparing Vantive’s actual financial results to projected results” was insufficient to allege knowledge of problems in producing and selling products because plaintiffs “failed to include corroborating details of the internal reports” such as “dates or contents of reports” or how plaintiffs learned about the reports). Defendants assert that, under this standard, Plaintiffs have failed to provide particularized facts showing that Defendants knew that what they stated publicly regarding the development of commercial MRAM was false. The Court agrees that Plaintiffs have failed to show that Individual Defendants knew that their statements regarding commercial MRAM development were false. As previously discussed, there are no specific allegations that particular MRAM development problems were conveyed to any of the Individual Defendants.- Plaintiffs have alleged that Defendants were high-ranking executives involved in MRAM development, particularly Kaszubinski. However, the Amended Complaint never sufficiently alleges that the MRAM development problems were insurmountable or made specific time lines impossible or highly unlikely. There are allegations of general employee fears and individual beliefs regarding the possible success of MRAM, but no specific information to which Defendants had access that made their optimistic statements false. 3. Temporal Proximity Among the factors relevant to a finding of scienter is the proximity between the allegedly fraudulent statement or omission and the disclosure of inconsistent information. See In re Navarre Corp. Sec. Litig., 299 F.3d 735, 745 (8th Cir.2002) (citing with approval the “nine factors usually relevant to scienter” set forth in Helwig v. Vencor, Inc., 251 F.3d 540, 552 (6th Cir.2001), which include “closeness in time of an allegedly fraudulent statement or omission and the later disclosure of inconsistent information”). Plaintiffs assert that, in this case, there is close temporal proximity between Defendants’ fraudulent statements and their revelation of the contrary truth. On February 14, 2005, Cypress announced that it was discontinuing its MRAM project and divesting its MRAM subsidiary, indicating that it could not develop an economically viable MRAM product. (Am.Compl^ 164.) Two weeks earlier, Baker and Kaszubinski had praised Cypress’s “impressive accomplishment” of producing “fully functional” MRAM alpha samples. {Id. ¶ 159.) Baker referred to the alpha samples as “remarkable devices,” and Kaszubinski characterized MRAM as “the answer to a critical need in semiconductor memory applications” and praised Daughton and NVE for their “important” contribution toward “reaching this milestone.” {Id.) Three months before the February 14 divestment, Baker defended SMS’s MRAM technology against accusations that Cypress “appears no closer that it has been to producing a commercially viable MRAM-based product,” by stating: “NVE is in a good position to capitalize on the commercialization of MRAM technology;” “Cypress has said they expect to see production in early 2005;” and “[w]e hope to introduce products at the same time as Cypress.” {Id. ¶¶ 152-53.) Plaintiffs argue that the close time period between NVE’s statements and the February 14 announcement demonstrate scienter. Defendants assert that Plaintiffs have not clearly indicated what “truth” was revealed. They argue that there is no specific fact to show that Defendants knew, early in the Class Period, that they would not seek to commercialize MRAM or that Defendants knew that the MRAM project would be a technical bust or too expensive to commercialize. Defendants also claim that there is nothing inconsistent about NVE announcing that it had fully functioning MRAM alpha samples a few weeks before Cypress announced that it was discontinuing its MRAM project because one of the reasons Cypress ■ discontinued the MRAM project was cost. They assert that the cost of production would not be fully realized until after production of a fully functioning MRAM alpha sample. Plaintiffs allegations regarding temporal proximity are weak. First, most of the allegedly misleading statements were made long before the February 2005 divestment announcement by Cypress. Second, as Defendants note, many of the statements are not contradicted by Cypress’s divestment announcement. The production of alpha samples was not inconsistent with Cypress’s decision to divest. However, NVE’s statement that Cypress expected to see production in early 2005, made on November 23, 2004, was contradicted by Cypress’s February 14, 2005, divestment, approximately three months later. Three months is not a particularly close temporal proximity, but the Court will weigh this closeness in time in its overall analysis of scienter. 4. Defendants’ Motive to Inflate Stock Prices a. Standard “[Ujnusual insider trading activity during the class period may permit an inference of bad faith and scienter.” In re K-tel Int’l, Inc. Sec. Litig., 300 F.3d 881, 895 (8th Cir.2002) (citation omitted). However, [ijnsider stock sales are not inherently suspicious; they become so only when the level of trading is dramatically out of line with prior trading practices at times calculated to maximize the personal benefit from undisclosed inside information. [CJomplaints based on insider trading must allege more than that the defendant benefitted from trading because of a false statement or misleading omission; the insider trades have to be unusual, either in the amount of profit made, the amount of stock traded, the portion of stockholdings sold, or the number of insiders involved, before they will give rise to the required inference of scienter. In re Navarre Corp. Sec. Litig., 299 F.3d 735, 747 (8th Cir.2002) (citations omitted). Plaintiffs assert that Baker’s and Daughton’s sales during the Class Period were unusual in timing and amount. Defendants respond that Plaintiffs have failed to indicate how the timing of the sales was unusual or suspicious. b. Daughton’s Sales From July 22, 2003 through August 25, 2003, Daughton sold 213,700 NVE shares, 49.9% of his holdings, at prices as high as $27.16 per share. (Am.Compl.1ffl 109, 181.) These sales, his first, followed a run-up of NVE share prices from a mid-May 2003 price of under $7 per share based on positive news issued by NVE. (Id. ¶ 131.) Plaintiffs admit that Daughton sold his stock early in the Class Period, before the price of NVE stock had peaked, but argue that the Court can still infer that he did so because NVE’s stock price had increased between 300% and 400% since the beginning of the Class Period based on Defendants’ misrepresentations and he knew that the payoff from MRAM was years away and he was not certain the high stock price could be sustained. (Am. ComplA 110.) Defendants argue that the vast majority of Daughton’s sales occurred approximately two months into the proposed Class Period, which spanned almost two years. (Am.ComplA 181.) Thus, his sales occurred before the majority of the alleged misrepresentations took place. Defendants also note that Daughton was 66 years old when he sold his stock and he told at least one confidential source that he decided to sell because he was getting ready to retire. (Am.ComplA 110.) c. Baker’s Sales On January 28, 2004, Baker sold 39,000 NVE shares at $58.33 per share and on January 30, 2004, he sold 26,000 NVE shares at $56.24 per share, for total proceeds of $3,737,110. (Am Compl. ¶¶ 132, 179.) The sales were his first and liquidated 89% of his NVE holdings. (Id. ¶ 132.) The sales were made after eight months of positive news by NVE. The stock had risen from its $7 price in mid-May 2003 to prices of approximately $56 per share, while NVE had disseminated positive information. Plaintiffs argue that Baker’s purchases during the Class Period of 952 shares at $23.69 per share, for a total price of $22,552.88 (Ex. 26 to Jancik Deck), are insignificant in comparison to his Class Period sales. Also, Plaintiffs note that, after his January 2005 NVE stock purchase, Baker still only held 8,837 shares. (Id.) Defendants argue that Baker’s sales all occurred more than one year before Cypress’s announcement that it was discontinuing the MRAM project. Furthermore, he actually purchased some NVE stock in January 2005, during the Class Period. d. Kaszubinski Plaintiffs make no particular allegations that Kaszubinski had a motive to make false and misleading statements. e. Analysis Plaintiffs assert that Baker’s and Daughton’s trades were unusual and profitable. See, e.g., In re Navarre Corp. Sec. Litig., CM No. 05-1151 (PAM/RLE), 2006 WL 1795141, at *5 (D.Minn. June 28, 2006) (unpublished) (holding that plaintiffs sufficiently pled scienter when, among other facts supporting a strong inference of scienter, they pled that “Defendants sold their stock at financially advantageous times and" prior to significant restatements, ... Defendants’ sales of stock [were characterized] as insider trading, and ... the trading activity was unusual compared to Defendants’ prior trading activity.”). Defendants point out that both Baker and Daughton could have made far more profit by selling later in the Class Period. See Ronconi v. Larkin, 253 F.3d 423, 435 (9th Cir.2001) (“Seven of the insiders who sold 69 percent or more of their total stock and options during the class period, did so during October and January at share prices between $52 7/8 and $56 1/4. But the share price rose to $73 in March after they had sold their stock, and when the below-expectation earnings report was released in April, the stock dropped to $49. When insiders miss the boat this dramatically, their sales do not support an inference that they are preying on ribbon clerks who do not know what the insiders know.”). Daughton’s trading was not unusual as it occurred only two months into a two-year Class Period; he sold long before the stock price peaked; and he sold his stock for less than half of the peak price. There is no evidence of unusual trading by Kaszu-binski. Baker did sell the majority of his stock at a price closer to peak price. This fact does provide some support for scien-ter on Baker’s behalf. However, Baker’s sales occurred less than one year into the two-year Class Period, and the Amended Complaint otherwise provides scant allegations that he had knowledge of or access to information that NVE public statements were materially false. The Court concludes that Plaintiffs have not alleged with particularity facts giving rise to a strong inference that the Individual Defendants acted with requisite scienter. The Court has taken into account the somewhat, but not very, unusual trading by Baker, the three-month temporal proximity between NVE’s reporting of Cypress’s production prediction and Cypress’s divestment announcement, and the Individual Defendants’ high-ranking positions within NVE and Cypress and their access to information, as well as all of the Court’s previous scienter analysis. It concludes that these allegations are insufficient. 5. Scienter of Corporate Defendant Plaintiffs assert that they have sufficiently alleged NVE’s scienter by alleging scienter against the Individual Defendants. See Piper Jaffray Cos. Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 38 F.Supp.2d 771, 779-80 (D.Minn.1999) (holding corporation’s liability is “merely concurrent with or derivative of the liability of the officers and directors”). Because the Court holds that Plaintiffs have failed to sufficiently allege the scienter of the Individual Defendants, it also holds that Plaintiffs have failed to adequately plead scienter for NVE. D. Whether Alleged Misrepresentations and Omissions Were Material 1. Standard To present an actionable claim for securities frauds, the alleged misstatements must be material.... While materiality is generally a question of fact reserved for the jury, alleged misrepresentations are immaterial as a matter of law where a court determines that no reasonable investor could have been swayed by the alleged misrepresentation. A misrepresentation or omission is material if 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. Alleged misrepresentations can be immaterial as a matter of law if they: 1) are of such common knowledge that a reasonable investor can be presumed to understand them; 2) present or conceal such insignificant data that, in the total mix of information, it simply would not matter; 3) are so vague and of such obvious hyperbole that no reasonable investor would rely upon them; or 4) are accompanied by sufficient cautionary statements. Cautionary language which relates directly to that which the Plaintiffs claim to have been misled, if sufficient, renders the alleged misrepresentation or omissions immaterial as a matter of law. In re Amdocs Ltd. Sec. Litig., 390 F.3d 542, 547-48 (8th Cir.2004) (citations omitted). 2. The Bespeaks Caution Doctrine a. Standard The “bespeaks caution doctrine,” ... provides that when an offering document’s forecasts, opinions or projections are accompanied by meaningful cautionary statements, the forward-looking statements will not form the basis for a securities fraud claim if those statements did not affect the ‘total mix’ of information the document provided investors. In other words, cautionary language, if sufficient, renders the alleged omissions or misrepresentations immaterial as a matter of law. The cautionary language must relate directly to that by which plaintiffs claim to have been misled. A dismissal of a securities fraud complaint under Rule 12(b)(6) should be granted under the bespeaks caution doctrine only where the documents containing defendants’ challenged statements include enough cautionary language or risk disclosure that reasonable minds could not disagree that the challenged statements were not misleading. Parnes v. Gateway 2000, Inc., 122 F.3d 539, 548 (8th Cir.1997) (citations omitted). See also 15 U.S.C. § 78u-5 (c)(1)(A)© (providing a safe harbor for any “forward-looking statement [that] is ... identified as a forward-looking statement, and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement”). b. NVE’s Cautionary Statements Defendants note that their statements were accompanied by warnings in their SEC Form 10-KSB filings. NVE’s May 16, 2003, SEC Form 10-KSB filing warned, among other things, that “failure to meet technical challenges could limit our ability to produce marketable products,” explaining that its “products use new technology and we are continually developing product designs and production processes. Our production processes require control of magnetic and other parameters that are not required in conventional semiconductor processes. If we are unable to develop stable designs and production processes we may not be able to produce products that meet our customers’ requirements, which could cause damage to our reputation and loss of revenue;” that it had “limited influence over the rate of adoption of [MRAM] technology and MRAM technology may not build into a large or significant market,” explaining that “[a] significant portion of our future revenues and profits is dependent on our licensees and manufacturing partners introducing production MRAM products. Production difficulties, technical barriers, high production costs, poor market reception and other problems, many of which are outside our control, could prevent the deployment of MRAM or limit its market potential. In addition, our licensees and manufacturing partners may have other priorities that detract attention and resources from introduction of MRAM products using our technology. Furthermore, competing technologies could prevent or supplant MRAM from becoming an important memory technology;” that NVE “reifies] on a limited number of strategic relationships to reach our markets and if these relationships deteriorate our future revenue could be reduced,” explaining that its “license agreements do not require [its] licensees to use our intellectual property. Our licensees could circumvent or find alternatives to our technology. We rely on these license relationships to address the MRAM market, and the deterioration of any of these relationships could significantly impair our access to the MRAM market and reduce future revenues;” and that NVE’s MRAM patent rights may be challenged or rendered unenforceable. (Ex 1 to Jancik Deck at 19-23.) NVE’s May 27, 2004, SEC Form 10-KSB filing warned, among other things, that “[o]ur reputation could be damaged and we could lose revenue if we fail to meet technical challenges required to product marketable products,” explaining that “[o]ur products use new technology and we are continually researching and developing product designs and production processes. Our production processes require control of magnetic and other parameters that are not required in conventional semiconductor processes. If we are unable to develop stable designs and production processes we may not be able to produce products that meet our customers’ requirements, which could cause damage to our reputation and loss of revenues;” that its “business may suffer because we have limited influence over the rate of adoption of our technology, and MRAM technology may not build into a large or significant market,” explaining that “[a] significant portion of our future revenues and profits is dependent on our licensees and manufacturing partners introducing MRAM products. Production difficulties, technical barriers, high production costs, poor market reception or other problems, almost all of which are outside our control, could prevent the deployment of MRAM or limit its market potential. In addition, our licensees and manufacturing partners may have other priorities that detract attention and resources from introduction of MRAM products using our technology. Furthermore, competing technologies could prevent or supplant MRAM from becoming an important memory technology;” that NVE’s “licensees may not be able to make commercially viable MRAMs, which would limit our revenue from MRAM and likely cause our stock price to decline,” explaining that “MRAM is a new technology, and we are almost completely dependent on our licensees to convert our intellectual property into commercially viable MRAM. While our licensees have made prototypes and samples, several technical and manufacturing issues must be resolved before commercially viable devices can be produced, and these problems may never successfully be solved. Cypress has said they have made working MRAM, but has missed several schedule targets for sample devices, and further delays could have a material impact on our revenues from MRAM. Motorola has announced plans for pilot production by late 2004, but any delays could have a material impact on our potential MRAM license revenues;” that NVE is “highly dependent on Motorola” and its success in embedding MRAM, but that “[tjechnical difficulties with embedding, production difficulties, high production costs, or other problems, almost all of which are outside our control, could limit our potential MRAM royalties;” that NVE is “highly dependent on Cypress for potential supply of MRAM devices using their designs and may lose revenue if we need to replace Cypress as a supplier,” explaining that “[i]f Cypress is unable to manufacture devices for us for any reason, it could be difficult for us to find another manufacturer for their designs;” that “Cypress could cancel their MRAM development program at any time because of financial or other consideration. A cancellation of their MRAM program would likely eliminate our opportunity to sell devices based on their designs;” that NVE’s “license agreements do not require our licensees to use our intellectual property” and that “[i]t is possible that our licensees might make MRAM devices without using our technology or infringing on our patents, and we would not receive royalties on such devices;” and that NVE may be unable to enforce its intellectual property rights. (Ex. 2 to Jancik Decl. at 15-17.) These warnings were incorporated into NVE’s subsequent press releases either by reference or explicitly. (See Exs. 4, 11-12, 14-17, 21-22 to Jancik Decl.) “SEC filings incorporated by reference are adequate to invoke the Safe Harbor provision for forward-looking statements.” In re Humphrey Hospitality Trust, Inc. Sec. Litig., 219 F.Supp.2d 675, 684 (D.Md.2002) (citations omitted). See also Yellen v. Hake, 437 F.Supp.2d 941, 963-64 (S.D.Iowa 2006) (collecting cases so holding). c. Analysis Meaningful cautionary language need not explicitly mention the realized risk, as long as it warned of risks of similar significance; however, a generic warning is not sufficient under the bespeaks caution doctrine. Yellen, 437 F.Supp.2d. at 964. Plaintiffs assert that, in this case, NVE’s announcements were accompanied by general categories of risk factors applicable to NVE’s ability and potential to commercialize MRAM, but did not contain warnings regarding the specific problems Cypress and SMS were encountering on the MRAM project, such as the blinky bits problem. Nor did the warnings mention that SMS had been unable to achieve economically viable yields of its MRAM chips. However, the May 16, 2003, SEC filing specifically warned of technological challenges to development of MRAM technology such as the control of magnetic and other parameters and the need to develop stable designs. Additionally, the May 2004 SEC filing warned that NVE’s licensees might not be able to make commercially viable MRAM and stated, “While our licensees have made prototypes and samples, several technical and manufacturing issues must be resolved before commercially viable devices can be produced, and these problems may never successfully be solved. Cypress has said they have made working MRAM, but has missed several schedule targets for sample devices, and further delays could have a material impact on our revenues from MRAM.” This warning specifically addresses Cypress’s failure to meet deadlines and, although not using the specific term “blinky bits,” addresses the fact that possibly unresolvable technical issues still remained. This warning is not a boilerplate warning, but is tailored to the actual risk of which Plaintiffs complain. To the extent that NVE’s forward-looking statements were accompanied by these warnings, as specifically addressed in the Conclusion of this Opinion, they fall under the safe harbor and the bespeaks caution doctrine. Plaintiffs also assert that not all of the misrepresentations alleged in the Amended Complaint are forward-looking. For example, in Paragraph 126, NVE states, “And we are seeing samples and prototypes of devices. Cypress recently demonstrated prototypes.” NVE also made statements such as, “Cypress reported achieving economic yields.” (Id. ¶¶ 118, 122.) Plaintiffs are correct that some of the statements are not forward-looking. The Court addresses each statement in turn in its Conclusion. 3. Puffing Statements that constitute puf-fery, “statements [that] are so vague and such obvious hyperbole that no reasonable investor would rely upon them,” are not actionable. Parnes v. Gateway 2000, Inc., 122 F.3d 539, 547 (8th Cir.1997). “[S]oft, puffing statements generally lack materiality because the market price of a share is not inflated by vague statements predicting growth. No reasonable investor would rely on these statements, and they are certainly not specific enough to perpetrate a fraud on the market.” Id. (citation omitted). Defendants argue that many of the statements identified by Plaintiffs are puf-fery or general optimistic statements. For example, Defendants claim that NVE’s statements that its licensees were “leading the race” to develop MRAM (Am. Compl-¶ 118) and that MRAM is something that comes around “once in [a] lifetime” (Id. ¶ a 113) are classic puffery and, therefore, immaterial as a matter of law. See, e.g., Pames, 122 F.3d at 547 (holding that, as a matter of law, “any misrepresentation regarding the Defendants’ prediction of ‘significant growth’ is immaterial” as puffery). Plaintiffs argue that statements regarding quality can be considered to be more than puffery. See City of Monroe Employees Retirement Sys. v. Bridgestone Corp., 399 F.3d 651, 672 (6th Cir.2005) (holding that statement that “[w]e continually monitor the performance of all our tire lines, and the objective data clearly reinforces our belief that these are high-quality, safe tires,” was not mere puffery in light of multiple lawsuits filed against Bridgestone based on tire quality and several calls for recalls from safety groups). However, the Bridgestone case hinged on the fact that the company had stated that “objective data” supported its claim. Id. at 672-74. Optimistic statements by Defendants in this case regarding the general importance and quality of the MRAM technology did not contain any assertion that the statements were supported by “objective data” or were otherwise subject to verification by proof. As specifically applied to particular statements in the Conclusion of this Opinion, the Court agrees that some of NVE’s statements are so vague that they constitute puffery. The Court also concludes that Defendants’ statements regarding MRAM’s development must be viewed in light of the fact that MRAM is an innovative and developing technology, which Plaintiffs do not dispute. See, e.g., In re Nokia Oyj (Nokia Corp.) Sec. Litig., 423 F.Supp.2d 364, 405 (S.D.N.Y.2006) (noting the “the uncertainty inherent in contemporaneously predicting market trends and technological developments” and holding that, when a company was attempting to fix its technological problems, it “was well within reason to have an optimistic outlook about its new products”). Here, there is no allegation that, until SMS was divested, it ceased working to solve obstacles to MRAM commercialization, such as the blinky bits problem. E. Conclusion: Analysis of Each Alleged St