BlackBerry faces lawsuit accusing it of misleading investors over its future
A class action lawsuit has been filed against BlackBerry by a shareholder claiming the company misled investors about its future, including how the BlackBerry 10 smartphone line would fare against competitors.
The lawsuit seeks to represent thousands of shareholders who purchased BlackBerry stock from September 27 last year to September 20 this year, a period in which it alleges executives misrepresented the state of BlackBerry's operations.
Canada-based BlackBerry, formerly Research In Motion, 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 filed in a United States federal court on Friday.
"In reality, the BlackBerry 10 was not well received by the market, and the company was forced to ... lay off approximately 4,500 employees, totalling approximately 40 per cent of its total workforce," the complaint alleges.
BlackBerry's CEO, Thorsten Heins, and chief financial officer Brian Bidulka were also named as defendants.
A representative for BlackBerry declined to comment, saying the company was "reviewing the matter".
BlackBerry disclosed last month that it would book nearly a billion US dollars in losses related primarily to the writedown of unsold BlackBerry Z10 touchscreen smartphones.
The lawsuit claims that the recent tumble in BlackBerry stock was a direct fallout from the executives' misrepresentation of BlackBerry's financial state.
Since September 20, when the company disclosed the massive loss and lay-offs, BlackBerry's share price has fallen 25 per cent on the Nasdaq exchange.
BlackBerry has faced numerous other class action lawsuits in the past. A US judge threw out one lawsuit in 2011.