On June 23, 2014, the Supreme Court decided Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. ___ (2014) (slip op.) (Halliburton II). The securities law bar had been on pins and needles since oral argument because the case put Basic v. Levinson—the canonical precedent that made most securities class actions possible—squarely in the Court’s crosshairs. Given that four Justices had recently expressed their willingness to reconsider Basic’s fraud-on-the-market presumption of reliance, 1Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 133 S. Ct. 1184, 1204 (2013) (Alito, J., concurring); id. at 1208 n.4 (Thomas, J., dissenting). securities jurisprudence appeared to be one vote away from a sea change.
Securities plaintiffs and the lawyers who represent them let out a collective sigh of relief when Chief Justice Roberts announced that the Court’s majority had spared Basic. But in the second half of its opinion, the Court announced a significant restriction on securities plaintiffs’ ability to invoke the presumption in the class action context. Specifically, the Court held 9-0 that defendants can nip securities fraud class actions in the bud by rebutting the presumption of reliance at the class-certification stage with evidence that the alleged misrepresentations had no impact on the stock’s price.
The question moving forward is precisely how the Court’s Solomonic Halliburton II decision will affect securities fraud class actions. This essay provides the background necessary to grasp the key takeaways from the Halliburton II case and then predicts what practitioners, plaintiffs, and defendants can expect going forward.
‘Basic’ and the Fraud-on-the-Market Presumption.
Section 10(b) of the Securities Exchange Act of 1934 and the Securities Exchange Commission’s Rule 10b-5 prohibit making any material misstatement or omission in connection with the purchase or sale of any security. 2Securities and Exchange Act of 1934, 48 Stat. 891, 15 U.S.C. §78j(b), and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. §240.10b-5 (2013). Section 10(b) does not create a private cause of action, but the Court has recognized an implied private cause of action to enforce the provision and its implementing regulation. 3Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730 (1975). To recover damages under section 10(b) and Rule 10b-5, a plaintiff must demonstrate “‘(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.’” 4Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 133 S. Ct. 1184, 1192 (2013) (quoting Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309, 1317-18 (2011)).
The Basic and Halliburton II line of cases focuses on the reliance element. Reliance “‘ensures that there is a proper connection between a defendant’s misrepresentation and a plaintiff’s injury.’” 5Amgen, 133 S. Ct. at 1192 (quoting Erica P. John Fund, Inc. v. Halliburton Co., 131 S. Ct. 2179, 2183 (2011) (Halliburton I)). “The traditional (and most direct) way a plaintiff can demonstrate reliance is by showing that he was aware of a company’s statement and engaged in a relevant transaction—e.g., purchasing common stock—based on that specific misrepresentation.” 6Id. In Basic, though, the Court held that securities plaintiffs can, in certain circumstances, satisfy the reliance element of a Rule 10b-5 action by invoking a rebuttable presumption of reliance. The Court premised that presumption on the “fraud-on-the-market theory,” which posits that “the market price of shares traded on well-developed markets reflects all publicly available information, and, hence, any material misrepresentations.” 7Basic, 485 U.S. at 246.
To invoke the presumption of reliance under Basic, a plaintiff must demonstrate that (1) the misrepresentation was public; (2) it was material; (3) the market the security traded in was efficient; and (4) the plaintiff traded the security between the time of the misrepresentation and the time the truth was revealed. 8Basic, 485 U.S. at 248 n.27. But Basic also emphasized that the presumption of reliance was rebuttable by “[a]ny showing that severs the link between the alleged misrepresentation and either the price received (or paid) by the plaintiff, or his decision to trade at a fair market price.” 9Id. at 248. If the defendant successfully rebuts the presumption of reliance, then the plaintiff must prove that he directly relied on the defendant’s misrepresentations when buying of selling the stock.
Basic’s fraud-on-the-market presumption is particularly critical to securities fraud class action plaintiffs. To get a class certified under Federal Rule of Civil Procedure 23(b)(3), the putative class must demonstrate that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” If the class is able to invoke the fraud-on-the-market presumption at the class-certification stage, then reliance will be presumed classwide. But if the class fails to prove up the elements of the presumption or if the defendant successfully rebuts them, investors have to prove reliance on an individual basis, and individual issues will predominate over common ones. Basic itself recognized that without the presumption of reliance, securities fraud plaintiffs could rarely satisfy Rule 23(b)(3)’s predominance requirement, making the fraud-on-the-market presumption the lifeblood of modern securities fraud class actions. 10485 U.S. at 230, 242; Halliburton I, 131 S. Ct. at 2185.
‘Halliburton I’ and ‘Amgen.’
In Halliburton I, the Court held that securities plaintiffs need not prove, at the class-certification stage, that the alleged misstatement caused investor losses, or “loss causation”; the Court vacated the court of appeals’ contrary holding and invited the lower court on remand to consider other arguments against class certification. 11131 S. Ct. at 2187. Then in Amgen, the Court held that the materiality of the alleged misstatement—whether a reasonable investor would have considered the misstatement to have significantly altered the total mix of available information—need not be established at the class-certification stage. 12133 S. Ct. at 1198-1200. In separate opinions, however, four Justices expressed interest in reconsidering Basic in light of a wave of recent scholarship calling the fraud-on-the-market theory into question. 13Id. at 1204 (Alito, J., concurring); id. at 1208 n.4 (Thomas, J., concurring). These decisions set the stage for Halliburton II.
On remand to the district court from Halliburton I, Halliburton argued that class certification was inappropriate because the evidence it had earlier introduced to disprove loss causation also demonstrated that none of its alleged misrepresentations actually affected its stock price. By demonstrating the absence of any “price impact,” Halliburton argued it had rebutted Basic’s presumption that the members of the putative class had relied on its alleged misrepresentations simply by buying or selling its stock at the market price. And without the benefit of the Basic presumption, investors would need to prove reliance on an individual basis, meaning individual issues would predominate over common ones. The district court declined to consider Halliburton’s argument and certified the class under Rule 23(b)(3).
The Fifth Circuit affirmed. 14718 F.3d 423 (5th Cir. 2013). It acknowledged that “Halliburton’s price impact evidence could be used at the trial on the merits to refute the presumption of reliance,” 15Id. at 433. but held that Halliburton could not use such evidence for that purpose at the class-certification stage. 16Id. at 435. The Supreme Court granted certiorari again, this time to resolve a conflict among the circuits over whether securities fraud defendants may attempt to rebut the Basic presumption at the class certification stage with evidence of a lack of price impact. The Court also accepted Halliburton’s invitation to reexamine Basic itself.
‘Halliburton II.’
Chief Justice Roberts, writing for the Court’s majority, rejected Halliburton’s sharp attacks on Basic, explaining that Basic declined to adopt any particular theory of market efficiency but instead merely “recognized that market efficiency is a matter of degree” and thus “a matter of proof.” 17Halliburton II, slip op. at 19. The Court did not deny that large classes of investors do not rely on the integrity of the market price when purchasing stock and in fact trade based on their belief that the market price does not reflect the stock’s intrinsic value. But for the majority it was sufficient that “most investors” can be presumed to rely on the integrity of the market price. 18Id. at 11-12.
Halliburton had also argued that Basic’s presumption was out of line with the Court’s more recent decisions narrowly construing the Section 10b-5 cause of action. The majority explained that the presumption does not eviscerate the reliance element of the 10b-5 cause of action as Halliburton had argued. Instead, it merely provides an alternative method of satisfying that element. 19Id. at 13-14. The majority also found the presumption consistent with the Court’s recent class certification decisions, including Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Comcast v. Behrend, 133 S. Ct. 1426 (2013), which established that a plaintiff must prove, not merely plead, the Rule 23(b) class certification requirements. The majority explained that like all class plaintiffs, to secure class certification, securities fraud plaintiffs must carry their “burden of proving” the prerequisites of publicity, materiality, market efficiency, and market timing. 20Halliburton II, slip op. at 14.
The Court explained that stare decisis has “special force” “in respect to statutory interpretation” because “Congress remains free to alter what we have done.” 21Id. at 12 (internal quotation marks omitted). According to the majority, that principle applied to Basic’s presumption even though “the presumption is a judicially created doctrine designed to implement a judicially created cause of action.” 22Id. The Court explained that for stare decisis purposes, it would treat the presumption as if it were a statutory interpretation because “it provides a way of satisfying the reliance element of the Rule 10b-5 cause of action.” 23Id. (citation omitted). Given the possibility that “Congress may overturn or modify any aspect of our interpretations of the reliance requirement, including the Basic presumption itself,” the Court saw “no reason to exempt the Basic presumption from ordinary principles of stare decisis.” 24Id. at 13.
Three Justices—Justices Scalia, Alito, and Thomas—strongly disagreed with the Court’s decision to keep Basic alive. In their view, logic and “economic realities” required overruling Basic. 25Id. at 2 (Thomas, J., concurring in judgment). In light of the academic attack on the fraud-on-the-market’s underlying premises, it had become clear to them that Basic was wrongly decided and inconsistent with the Court’s recent class certification jurisprudence. 26Id. at 5. They explained that many of the assumptions underlying the Basic presumption—like the hypotheses that well-developed markets are efficient and investors buy stock on the belief that its price accurately reflects its value—are often demonstrably false. 27Id. at 9-11. Furthermore, Basic’s presumption allows securities plaintiffs to bypass the need to establish class-certification requirements with “evidentiary proof” as required by Wal-Mart and Comcast. 28Id. at 11. Thus, Justices Thomas, Scalia, and Alito would have declined to give stare decisis effect to Basic.
The concurring Justices were not persuaded by the majority’s argument that Basic should get the special stare decisis force given to statutory interpretation. They explained that “Basic … has nothing to do with statutory interpretation. The case concerned a judge-made evidentiary presumption for a judge-made element of the implied 10b-5 cause of action.” 29Id. at 15. In their view, “when we err in areas of judge-made law [like Basic], we ought to presume that Congress expects us to correct our own mistakes.” 30Id. at 16. Indeed, for the concurring Justices, “[t]hat duty is especially clear in the Rule 10b-5 context, where we have said that ‘[t]he federal courts have accepted and exercised principal responsibility for the continuing elaboration of the scope of the 10b-5 right and the definition of the duties it imposes.’” 31Id. (quoting Musick, Peeler & Garrett v. Employers Ins. of Wausau, 508 U.S. 286, 292 (1993)). Thus, the concurring Justices would have treated “Basic’s presumption of reliance [as] … our mistake to correct.” 32Id.
In contrast to the 6-3 split on whether to overrule Basic, all nine Justices agreed with Halliburton on its fallback position regarding whether and how courts can consider evidence of price impact at the class-certification stage. Price impact measures “‘whether the alleged misrepresentations affected the market price in the first place.’” 33Id. at 17 (majority) (quoting Halliburton I, 131 S. Ct. at 2187). In its fallback argument, Halliburton contended first that the Court should require securities fraud class plaintiffs to prove price impact at the class-certification stage and, second, that short of that, the Court should allow defendants to rebut the presumption at the class-certification stage with evidence of no price impact. The Court rejected the first argument that the plaintiff should have to prove price impact to invoke the presumption. 34Id. at 16-18. The Court acknowledged that the presumption collapses without price impact. 35Id. at 17 (citing Amgen, 133 S. Ct. at 1199). Yet it held that plaintiffs need not demonstrate the existence of price impact to invoke the presumption. 36Id. at 17-18. The Court reasoned that requiring plaintiffs to demonstrate price impact at the class-certification stage would be tantamount to eliminating parts of Basic’s presumption, because it would eliminate the “constituent presumption” that a misrepresentation affects the stock price where the misrepresentation is public and material and where the stock trades in an efficient or well-developed market. 37Id.
But the Court unanimously embraced Halliburton’s argument that defendants must be “allowed to defeat the [Basic] presumption at the class certification stage through evidence that the misrepresentation did not in fact affect the stock price.” 38Slip op. at 18. The Court emphasized that the same “event studies” that parties often use to debate market efficiency at the class-certification stage also happen to bear upon the existence or lack of price impact. Thus, defendants resisting class certification should be allowed to use the same evidence to show that, for each alleged misstatement, there was no price impact. The Court explained that a contrary rule would have “bizarre results”:
Suppose a defendant at the certification stage submits an event study looking at the impact on the price of its stock from six discrete events, in an effort to refute the plaintiffs’ claim of general market efficiency. All agree the defendant may do this. Suppose one of the six events is the specific misrepresentation asserted by the plaintiffs. All agree that this too is perfectly acceptable. Now suppose the district court determines that, despite the defendant’s study, the plaintiff has carried its burden to prove market efficiency, but that the evidence shows no price impact with respect to the specific misrepresentation challenged in the suit. The evidence at the certification stage thus shows an efficient market, on which the alleged misrepresentation had no price impact. And yet under [plaintiffs’] view, the plaintiffs’ action should be certified and proceed as a class action (with all that entails), even though the fraud-on-the-market theory does not apply and common reliance thus cannot be presumed. 39Id. at 19-20.
“Price impact is thus an essential precondition for any Rule 10b-5 class action,” the Court concluded. 40Id. at 21.
The Fifth Circuit had relied on Amgen to conclude that Halliburton could not introduce evidence of lack of price impact to defeat class certification. In Amgen, the Court had held that plaintiffs need not establish—and defendants may not rebut—materiality at the class certification stage to invoke the presumption. 41133 S. Ct. at 1198-1200. The Court reasoned that a failure of proof on materiality would necessarily defeat every plaintiff’s claim on the merits, leaving no individualized questions to resolve. 42Id. at 1199. The Court explained that materiality was thus different than publicity and market efficiency, neither of which is necessary to prove a Rule 10b-5 claim on the merits. 43Id.
In Halliburton II, the Court explained that “price impact differs from materiality in a crucial respect.” 44Slip op. at 21. Because the other Basic prerequisites must be proven at the class-certification stage, “the common issue of materiality can be left to the merits stage without risking the certification of classes in which individual issues will end up overwhelming common ones.” 45Id. at 21-22. But price impact is “‘Basic’s fundamental premise’” and thus “has everything to do with the issue of predominance at the class certification stage.” 46Id. at 22 (quoting Halliburton I, 131 S. Ct. at 2186). Moreover, market efficiency and publicity are “nothing more than prerequisites for an indirect showing of price impact.” 47Id. In other words, proof of market efficiency and publicity is really just indirect proof of price impact. The Court held that there is “no reason to artificially limit the inquiry at the certification stage to indirect evidence of price impact.” 48Id. Halliburton II thus clarified that Basic “does not require courts to ignore a defendant’s direct, more salient evidence showing that the alleged misrepresentation did not actually affect the stock’s market price and, consequently, that the Basic presumption does not apply.” 49Id. at 21.
What to Expect Moving Forward.
What changes in securities fraud class action litigation should we expect in the wake of Halliburton II? It would be wrong to assume that because Basic survived there is “nothing to see here.” Halliburton II transformed price impact from Basic’s fundamental but ironically untouchable premise into a central front in the class-certification war. The defendant may now introduce event studies or other direct evidence undermining the existence of price impact at the class-certification stage. Until Halliburton II, the Basic presumption was essentially irrebuttable in practice. That made securities fraud class actions the exception to the Wal-Mart and Comcast rule that applied in all other class actions, which required plaintiffs to prove that they had met Rule 23’s requirements before a court would certify a class. After Halliburton II, securities fraud class actions are no longer the exception to that Rule: Plaintiffs must now establish price impact either directly or indirectly. The remaining question is how will price impact rebuttal at the certification stage play out in the lower courts going forward.
Halliburton II gave the green light to certification-stage event studies undermining the existence of price impact for each “discrete event,” or, in other words, for each alleged misrepresentation. 50Id. at 19. If price impact is absent as to that individual event, then the presumption lacks an essential predicate, and the plaintiffs must prove actual reliance. When that happens, individual issues will predominate over common ones, thwarting class certification as to that misrepresentation. This is a significant departure from the way most plaintiffs currently invoke the presumption at the class certification stage. They generally present an expert report attesting to the overall efficiency of the market during the proposed class period, and little else. Halliburton II says that even if the market was generally efficient, the absence of price impact for any of the challenged misrepresentations will strip the plaintiffs of the presumption of reliance and thus the common question predominance necessary to satisfy Rule 23(b)(3) for the misrepresentations that had no price impact.
The Court’s endorsement of event studies means that the certification stage of future securities fraud class actions will likely become a battle of the experts. Dukes and Comcast already require plaintiffs to prove the prerequisites to certification and district courts to make findings on those issues by a preponderance of the evidence. The Court has explained that “the ‘class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff’s cause of action.’” 51Comcast, 133 S. Ct. at 1432 (quoting Dukes, 131 S. Ct. at 2551). Halliburton II clarifies that the same principle applies with equal force in securities fraud class actions.
We are not totally at sea in predicting how lower courts will apply Halliburton II because the Second and Third Circuits have allowed evidence of price impact at class certification to defeat the fraud-on-the-market presumption and thus foreclose class treatment. 52See, e.g., In re DVI Sec. Litig., 639 F.3d 623 (3d Cir. 2011); In re Salomon Analyst Metromedia Litig., 544 F.3d 474 (2d Cir. 2008). Cases from those circuits have demonstrated that district courts can handle the sort of certification-stage battle that Halliburton II presages. For example, since In re Salomon, district courts in the Second Circuit have examined expert testimony, event studies, and market reports in determining whether plaintiffs have shown that an alleged misrepresentation impacted a security’s price. Sometimes defendants won. 53See, e.g., Berks Cnty. Emp. Ret. Fund V. First Am. Corp., 734 F. Supp. 2d 533, 541 (S.D.N.Y. 2010) (denying class certification); In re Credit Suisse First Boston Corp. (Lantronix, Inc.) Analyst Sec. Litig., 250 F.R.D. 137, 143 (S.D.N.Y. 2008) (denying certification). Other times, plaintiffs won. See, e.g., In re Sadia, S.A. Sec. Litig., 269 F.R.D. 298, 310-15 (S.D.N.Y. 2010) (granting certification); In re Monster Worldwide, Inc. Sec. Litig., 251 F.R.D. 132, 138-39 (S.D.N.Y. 2008) (granting certification). In some cases, the district court found class certification proper for some misrepresentations, but not others. 54See, e.g., In re Am. Int’l Group Sec. Litig., 265 F.R.D. 157 (S.D.N.Y. 2010) (reducing the size of the class after considering both plaintiff’s and defendant’s price-impact evidence with respect to each alleged misrepresentation). Halliburton II ensures that defendants will have a fair chance at the class-certification stage, for if the Court had ruled out certification-stage price impact rebuttal, all of these classes would been certified.
In some percentage of Rule 10b-5 class actions, there will be no question that the stock’s price went up at the time of the alleged misrepresentations or went down after corrective disclosures. Although debates over how soon the stock price must move after the alleged misrepresentation or corrective disclosure are likely to sharpen after Halliburton II, cases in this category are not likely to change drastically because of Halliburton II. But two other common types of putative securities fraud classes will be more vulnerable to certification-stage attack going forward.
First, evidence that the price decline following an alleged corrective disclosure was not statistically significant will rebut the presumption of reliance:
[T]o the extent a [d]efendant can show that there was no price decrease in [the] stock on the date a misrepresentation was disclosed, … [this is] strong evidence that there was no price change on the date of the misrepresentation, thus rebutting the fraud-on-the-market presumption. 55In re Am. Int’l Sec. Litig., 265 F.R.D. at 181-82, 189.
That means that defendants will be able to jeopardize class certification by bringing forward event studies demonstrating that the stock price did not significantly move following an alleged corrective disclosure.
Second, even when a statistically significant price decline follows a disclosure, evidence that the disclosure was not, in fact, “corrective” of the alleged misrepresentation will also rebut the presumption of reliance. If the court “determine[s] that there was no corrective disclosure” as alleged by the plaintiff, the disclosure “cannot serve as the basis for certifying the class.” 56In re Moody’s Corp. Sec. Litig., 274 F.R.D. 480, 493 (S.D.N.Y. 2011). Without a correction to a prior misleading statement, there is no basis to infer that the original, allegedly false statement caused an inflation in the price in the first place.
Another important question moving forward is what sort of showing a defendant must make under Halliburton II to rebut the presumption at the class certification stage. The Court did not address that question explicitly in Halliburton II, but the answer can be found in Federal Rule of Evidence 301 and the Court’s cases applying other rebuttable presumptions. Rule 301 applies to all rebuttable presumptions unless Congress or the Rules of Evidence provide otherwise. 57See Fed. R. Evid. 301 (“In a civil case, unless a federal statute or these rules provide otherwise, the party against whom a presumption is directed has the burden of producing evidence to rebut the presumption”). Basic itself cited Rule 301 in creating the presumption, calling it a procedural “device for allocating the burdens of proof between parties.” 58485 U.S. at 245. Under Rule 301, “the party against whom a presumption is directed has the burden of producing evidence to rebut the presumption,” but a presumption “does not shift the burden of persuasion, which remains on the party who had it originally.”
In other contexts where the Court has created a rebuttable presumption, the party benefitting from the presumption has always borne the ultimate burden of persuasion. The Supreme Court has explained each of the procedural steps governing the order of proof where a Rule 301 presumption applies. 59St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 511 (1993). First, to invoke the presumption, either a plaintiff’s evidence must establish for the trier of fact the prima facie case by a preponderance of the evidence, or a judge must determine that any rational person would have to find the existence of facts constituting the prima facie case. 60Id. at 509-10 & n.3. Second, once created, the “presumption places upon the defendant the … burden of producing” evidence that, if believed by the trier of fact, would support a finding that the presumed fact does not exist. 61Id. at 506-07. Third, if “the defendant has succeeded in carrying its burden of production,” the presumption “is no longer relevant.” 62Id. at 510. At that time, the plaintiff must persuade the trier of fact of the ultimate fact by a preponderance of the evidence without the benefit of the presumption.” 63Id. at 511.
It is not difficult to apply these teachings to Basic’s presumption of reliance. A plaintiff must first establish the Basic prerequisites of market efficiency, publicity, and timing to invoke the presumption. 64Halliburton II, slip op. at 6-7 (citations omitted). This “indirect” evidence of price impact constitutes the plaintiff’s “prima facie” proof under Rule 301. A defendant may then rebut the presumption of reliance by producing evidence that could support a finding that the alleged misrepresentation did not impact the market price. If the defendant satisfies this relatively light burden of production, the presumption is “no longer relevant.” 65St. Mary’s Honor Ctr., 509 U.S. at 510. Instead, the plaintiff would then be required to prove by a preponderance of the evidence that the alleged fraud had been transmitted through the market price. 66See In re Salomon Analyst Metromedia Litg., 544 F.3d 474, 486 (2d Cir. 2008) (“If defendants attempt to make a rebuttal, … the district judge must receive enough evidence … to be satisfied that each Rule 23 requirement has been met.”).
The critical point is that defendants merely have the burden of producing evidence to rebut the presumption. 67Halliburton II, slip op. at 22-23. Once the presumption is rebutted with evidence sufficient to support a finding that the alleged misrepresentation did not impact the market price, it is the plaintiff’s burden to demonstrate price impact by a preponderance of the evidence. As the Supreme Court put it, “[p]rice impact is … an essential precondition for any Rule 10b-5 class action.” 68Id. at 21. Because plaintiffs bear the burden of satisfying Rule 23, and price impact is the fundamental premise of Rule 23 predominance, it follows that plaintiffs bear the ultimate burden to establish price impact once the defendant puts it in issue. Thus, the right of price-impact rebuttal promises to be a powerful tool for defendants seeking to resist class certification, especially in cases where the connection between the alleged misrepresentation and price movement is suspect.
Conclusion.
The Halliburton II majority’s decision to save Basic made the case less dramatic than it could have been, but the Court’s decision to allow defendants to rebut the presumption of reliance with evidence of no price impact at the class-certification stage marks a significant shift in the way securities fraud class-certification litigation will play out. Defendants now have a new and powerful weapon to stop crippling class actions in their tracks when plaintiffs cannot prove that the misrepresentations they allege affected the market price of the stock.
