BlackBerry Slammed with Class Action Lawsuit

Posted by Techvibes NewsDesk

BlackBerry and its executives are being being sued by a shareholder.

The class action lawsuit accuses Blackberry of inflating its stock price by implying business prospects of the company's new smartphone line were misleadingly positive.

Lodged in a Manhattan court by shareholder Marvin Pearlstein, the lawsuit seeks to represent a class of thousands of shareholders: those who bought the stock between September 27 last year—when BlackBerry bragged of a strong financial position—and September 20 of this year, when the company was hammered by a $1 billion tax loss.

"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% of its total workforce," the complaint alleges.

The company recorded revenue from the sale of 3.7 million smartphones during last quarter. The majority of those sales were BlackBerry 7 devices, not the new Z10. The company said that revenue for sales of the new devices, which were shipped to carriers, won’t be recorded until they’re sold to end-users. In total, 5.9 million BlackBerry devices were sold to end-users during the period.

BlackBerry still has $2.6 billion in cash and investments, but its burning through that fast. The company spent $500 million of its cash on-hand during the quarter.

Company:
BlackBerry
Website:
http://www.blackberry.com
Location:
Waterloo, Ontario, Canada

Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry solution in 1999. Since then, BlackBerry products and services have continued to change the way millions of people around the world stay connected. With the launch of BlackBerry 10, we have re-designed, re-engineered and re-invented BlackBerry. Not only did we introduce a... more


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Techvibes NewsDesk

Techvibes NewsDesk

Techvibes is Canada's leading technology media property.Founded in 2002, Techvibes covers technology and business news that impacts Canadians. We combine breaking local news with international coverage to deliver a unique balance of insight and information. The Techvibes Newsdesk covers a broad beat and publishes general news stories. If you have a story you would like covered, email... more




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