Ohio residents may be interested to learn that a shareholder lawsuit filed against Blackberry was recently dismissed. The lawsuit involved allegations that the company had artificially inflated its stock price by misleading its shareholders about the popularity of the Blackberry 10, which was launched in January 2013.
Designed to help recapture market share the company had lost with the surging popularity of Apple’s iPhone and Samsung’s Google-powered Android devices, the Blackberry 10 failed to sell as projected. Although the phone received positive reviews, sales were low, leading to a $930 million write down for unsold inventory that caused Blackberry’s shares to tumble by one-sixth in value in a single day.
Shareholders accused Blackberry of misleading them by overstating how well the phone was received by consumers who had purchased it. They also alleged that Blackberry waited too long to write off unsold inventory and that they recorded revenue too quickly, effectively manipulating their books. However, the judge ruled the plaintiffs had failed to prove that Blackberry had engaged in any of the activities alleged in the complaint.
Shareholder disputes may often occur after a company’s stock prices fall unexpectedly. Companies owe a fiduciary duty to their shareholders to provide them with accurate information regarding the business and its products. In the event a dispute arises, businesses may want to seek the help of a business and commercial law attorney. An attorney may be able to help resolve the dispute short of going to court. In the event a lawsuit is filed, an attorney may work on behalf of their client throughout the proceedings.
Source: Reuters, “BlackBerry wins dismissal of U.S. lawsuit over BlackBerry 10,” Jonathan Stempel and Euan Rocha, March 13, 2015.