“A shareholder of BlackBerry Ltd sued the company and its executives on Friday, accusing them of inflating the stock price by painting a misleadingly rosy picture of the business prospects of its BlackBerry 10 smartphone line,” Nick Brown reports for Reuters. “Waterloo, Ontario-based BlackBerry, formerly Research In Motion Ltd, misled investors last year by saying that the company was ‘progressing on its financial and operational commitments,’ and that previews of its BlackBerry 10 platform were well received by developers, according to shareholder Marvin Pearlstein in a lawsuit lodged in Manhattan federal court.”
“Pearlstein is seeking to represent a class of ‘thousands’ of shareholders who bought stock between Sept. 27, 2012, when the company touted its strong financial position, and Sept. 20 of this year, when it revealed it would have to write down between $930 million and $960 million related to unsold BlackBerry 10 devices, according to the lawsuit,” Brown reports. “‘In reality, the BlackBerry 10 was not well-received by the market, and the company was forced to… lay off approximately 4,500 employees, totaling approximately 40 percent of its total workforce,’ the complaint alleges.”
Brown reports, “In addition to BlackBerry, Chief Executive Thorsten Heins and Chief Financial Officer Brian Bidulka are named as defendants.”
Read more in the full article here.
MacDailyNews Take: If you bought RIM/BlackBerry stock at any time in the last three years expecting the iPhone roadkill to somehow magically spring to life, you’re too stupid to own stock.
That said, executives who misrepresent what’s really going on with their beleaguered companies certainly should be held responsible when the whole mess finally implodes.
[Thanks to MacDailyNews Readers “Fred Mertz” and “Lynn Weiler” for the heads up.]
Beleaguered Blackberry reports $965 million second quarter loss – September 27, 2013
T-Mobile USA stops stocking beleaguered BlackBerry’s phones – September 26, 2013
Amateur hour is over: Beleaguered BlackBerry sold to Fairfax Financial-led consortium – September 23, 2013
Beleaguered BlackBerry’s CEO calls Apple’s iPhone old news – March 18, 2013