BlackBerry said on Thursday it had agreed to pay $165 million to settle a class action lawsuit brought against it over eight years ago for allegedly defrauding shareholders by exaggerating BlackBerry 10 smartphones’ success and profitability.
Under the agreement, which requires a judge’s approval, the payment will be made to settle claims brought on behalf of those who bought the company’s shares between March 28, 2013 and Sept. 20, 2013.
Reuters reported on Wednesday that the company was planning to settle the lawsuit to avoid trial in the United States.
U.S. District Judge Colleen McMahon in Manhattan federal court granted a request from the company’s lawyers and shareholders to adjourn their planned trial to negotiate a preliminary settlement.
Shareholders accused the company of concealing BlackBerry 10’s true sales prospects in public statements during 2013, resulting in an inflated share price.
MacDailyNews Take: If you bought BlackBerry (Research In Motion) shares between March 28, 2013 and Sept. 20, 2013 you deserve more than a class action pittance, you deserve to have your head examined.
Beleaguered RIM is Dead Company Walking (DCW). They’re just killing time while praying for a buyout. — MacDailyNews, May 1, 2012
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Yep, buying Blackberry/RIM in 2013 was a long shot bet. That was patently obvious even to a casual investor. The iPhone as well as HTC-Samsung-Android phones were ultra skyrocketing, Windows phone without a keyboard was out(and Microsoft was one of the big purveyor of the keyboard smartphone even after iPhone — big LOL). The day of the physical keyboard on a smartphone was plain as day dying. Blackberry stock had seen a high of 140 but in 2013 was trading around 14. Why not take a shot at 14 and hope they could hit that high again? That’s a 1000% ROI!
I’ve done it a couple times (with small money), plenty of investors have tried the long shot. Just expect to lose money because the odds are against you (but sue to get a little back claiming the company tried to scam you with projected sales numbers).
The company did scam people. I used to follow it for several years. We used to talk about it on the investment sites. We could never understand why the CEO’s of the company, as well as the Chairmen could get away with lying so often. And I mean big, obvious lies! Even Chen, the current, and now fairly long serving CEO, has lied.
Frankly, if you are an investor, you need to listen to what’s being said and have the ability to evaluate it and see if it’s at least logical. But most investors, particularly small ones, are not adept at that.
And it’s still happening. How many times has Musk lied about Tesla? At least, in my counting, six to eight times. Yet, he was only hit once, and not the way it should have been.
While statements from upper management and board members are legally taken to be statements of fact, that are required to be correct, sometimes they aren’t. I get that if it’s just an error, that it’s ok, but when it veers into misdirection in a major way that has an affect on the stock price, or causes many customers to put money down that they turn out having no reason of expectation to obtain value for, because of statements that are deceptive, then the company, and the officer, should be hit with major fines, removed from running any public company again, and even charged with fraud.
So, the period in which RIM went from nothing to sky-high was a period when these guys were not lying, right? Rule: If the stock goes up and up and up, you will never, ever be a liar. If the stock collapses, you are always a liar, with whining babies cackling that the reason they had their ass handed to them was because they were liars.
Does BlackBerry still exist as an entity that can pay a $165M settlement without going bankrupt? Their website is mostly about enterprise service offerings. Maybe it’s time to change the company name.
Maybe to FrankenBerry or HackBerry.
They’re a much smaller company, but they can pay it.