PER CURIAM:
Plaintiffs City of Omaha, Nebraska Civilian Employees' Retirement System and City of Omaha Police and Fire Retirement System appeal from Judge Castel's dismissal of their amended and second amended complaints for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). The two complaints asserted claims for relief against defendants CBS Corp., Leslie Moonves, Frederic G. Reynolds, Susan Gordon, and Sumner Redstone under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 ("1934 Act"), see 15 U.S.C. §§ 78j(b), 78t(a), and S.E.C. Rule 10b-5, see 17 C.F.R. § 240.10b-5. We assume the parties' familiarity with the facts and record of prior proceedings, which we reference only as necessary to explain our decision to affirm.
Though plaintiffs' 77-page second amended complaint is replete with broad references to misrepresentations regarding CBS's revenue and the value of CBS's assets in early- to mid-2008, the asserted basis for plaintiffs' securities fraud claims is quite limited.
Applying these principles here, we affirm for substantially the reasons stated in the district court's thoughtful and thorough opinions. See City of Omaha, Neb. Civilian Emps.' Ret. Sys. v. CBS Corp., No. 08 Civ. 10816(PKC), 2011 WL 2119734 (S.D.N.Y. May 24, 2011); City of Omaha, Neb. Civilian Emps.' Ret. Sys. v. CBS Corp., No. 08 Civ. 10816(PKC), 2010 WL 1029290 (S.D.N.Y. Mar.16, 2010). That conclusion is reinforce by Fait v. Regions Fin. Corp., 655 F.3d 105 (2d Cir.2011), which had not yet been decided at the time of the district court's decisions.
The Fait plaintiffs also claimed that various statements concerning goodwill were false and misleading due to defendants' failure to conduct timely interim impairment testing. Id. at 108, 110. We rejected the argument, reasoning that the "plaintiff's allegations regarding goodwill d[id] not involve misstatements or omissions of material fact, but rather misstatements regarding . . . opinion." Id. at 110 (observing that, "[e]stimates of goodwill. . . are not matters of objective fact."). Relying in part on Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 111 S.Ct. 2749, 115 L.Ed.2d 929 (1991), we held that in this specific context, a plaintiff must "plausibly allege that defendants did not believe the statements regarding goodwill at the time they made them" to plead a material misstatement or omission. Fait v. Regions Fin. Corp., 655 F.3d at 112.
In urging otherwise, plaintiffs here, as in Fait, place considerable reliance on the Financial Accounting Standards Board's Statement of Financial Accounting Standards ("SFAS") No. 142, which "requires that goodwill be tested for impairment annually, or `more frequently if events or changed circumstances indicate that the asset might be impaired.'" Fait v. Regions Fin. Corp., 655 F.3d at 110. Plaintiffs maintain that the second amended complaint contains a number of factual allegations suggesting CBS's general financial deterioration during the first and second quarters of 2008, thereby plausibly demonstrating that proper application of SFAS No. 142 "mandated that Defendants perform an interim test of the value of goodwill" in the first or second quarter of 2008. Appellants' Br. at 11. We are not persuaded.
As the second amended complaint acknowledges, SFAS No. 142 requires interim goodwill impairment testing only where "events or changes in circumstances . . . indicate that it is more likely than not that the book value of a reporting unit exceeds its fair value." Second Am. Compl. ¶ 74. That complaint, however, contains only conclusory statements, not factual allegations, to support plaintiffs' contention that, at some point before October 10, 2008, defendants had knowledge of events or circumstances which would have required them to reach the conclusion that SFAS No. 142's "more likely than not" standard had been met with regard to any of CBS's reporting units—Television, Radio, Outdoor, Publishing, and Interactive. See generally Ashcroft v. Iqbal, 129 S.Ct. at 1949; accord Harris v. Mills, 572 F.3d 66, 72 (2d Cir.2009). Plaintiffs' allegations regarding the downward trajectory of CBS's overall market capitalization, declining advertising revenues for some CBS reporting units, analysts' expectations regarding the media business environment, and CBS's own anticipation of an economic slowdown may suggest that CBS expressed overly optimistic views regarding its overall business outlook.
Moreover, even if the second amended complaint did plausibly plead that defendants were aware of facts that should have led them to begin interim impairment testing earlier, such pleading alone would not suffice to state a securities fraud claim after Fait. Plaintiffs' second amended complaint is devoid even of conclusory allegations that defendants did not believe in their statements of opinion regarding CBS's goodwill at the time they made them. See Fait v. Regions Fin.
Finally, we note that the second amended complaint alleges that the market for CBS stock is highly efficient and incorporates into share price all publicly available information. As mentioned briefly above, appellants' complaint alleges two primary indicia as to why CBS should have been aware that impairment testing of its intangible assets was necessary in early 2008. First, they cite the widening gap between CBS's book value and the company's market capitalization, calculated by multiplying the number of outstanding shares by the closing price of the stock. They note that CBS's book value exceeded its market capitalization by $3.2 billion at the end of 2007 and that gap expanded to $8.8 billion at the end of the first quarter of 2008, and that the gap continued to grow until the impairment charge was assessed. In addition, appellants point to the decline in CBS's advertising revenue and various analysts' negative outlook on the advertising market. The allegations concerning advertising revenue are based on market data released by third parties, media reports, and statements made by CBS.
Plaintiffs conceded at oral argument that all of the information alleged to constitute "red flags" calling for interim impairment testing—in particular, the difference between CBS's book value and market capitalization, the declines in advertising revenues, and the expectations of analysts regarding the media business's environment—were matters of public knowledge. Also known to the public at pertinent times was that CBS's last impairment test occurred as a part of the 2007 year-end financial reporting, before the appearance of the "red flags." According to the second amended complaint's own allegations, therefore, CBS's market price would at all pertinent times have reflected the need for, if any, or culpable failure to undertake, if any, interim impairment testing. Under those circumstances, the second amended complaint does not allege in a plausible fashion that the market price of CBS stock was inflated by a fraud in failing to undertake interim impairment testing. That being the case, the second amended complaint does not sufficiently allege reliance upon a fraudulently inflated price. See Basic Inc. v. Levinson, 485 U.S. 224, 247, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) ("Any showing that severs the link between the alleged misrepresentation and. . . the price . . . will be sufficient to rebut the presumption of reliance. For example, if petitioners could show that the `market makers' were privy to the truth. . ., and thus that the market price would not have been affected by [the alleged] misrepresentations, the causal connection could be broken: the basis for finding that the fraud had been transmitted through market price would be gone.")
In light of this conclusion, we need not and do not reach defendants' alternative argument regarding scienter.