Troubled smartphone manufacturer BlackBerry has been hit by a class-action lawsuit by Marvin Pearlstein, a BlackBerry shareholder, for allegedly inflating the company’s stock price – thus misleading investors.
Pearlstein said he represents thousands of shareholders who bought stock in the company between September 2012 and 2013.
When Pearlstein bought his share in the company, BlackBerry presented a strong financial position, while in September of this year, they had to write off $930 million in unsold BlackBerry 10 devices.
“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 percent of its total workforce,” he alleges in his lawsuit.
Pearlstein made his argument in relation to a statement published by BlackBerry in September 2012, when Chief Executive Officer Thorsten Heins said that the company is in a turn-around strategy.
“[O]ur second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition … Make no mistake about it, we understand that we have much more work to do, but we are making the organizational changes to drive improvements across the company.”
According to Reuters, “BlackBerry put itself on the block in August after bleeding market share to other smartphone makers over the past few years, namely Apple Inc and Google Inc. It accepted a tentative offer of $4.7 billion from Fairfax Financial Holdings last month.”
BlackBerry’s Heins and Chief Financial Officer Brian Bidulka have been named as defendants in the claim, and no settlement amount has been disclosed.
Charlie Fripp – Consumer Tech editor