BlackBerry Hit With Class-Action Lawsuit
The plaintiff, Marvin Pearlstein, alleged that purchasers of BlackBerry stock between Sept. 27, 2012, and Sept. 20, 2013, were harmed as a result of false and misleading information regarding the company's progress.
Defendants in the case include BlackBerry Limited, CEO Thorsten Heins and CFO Brian Bidulka.
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"Specifically, the company failed to inform investors that, contrary to Defendants' statements touting the Company's new BlackBerry 10 line of smart phones and the financial strength of BlackBerry, the Company was not on the road to recovery and re-emerging as a lead player in the wireless communications industry," according to the filed complaint.
In addition to alleged false claims regarding the success of the BlackBerry 10 line, the lawsuit lists information released by BlackBerry "regarding BlackBerry's business, operations, management, future business prospects and the intrinsic value of BlackBerry common stock" caused investors to "purchase BlackBerry common stock at artificially inflated prices."
The official complaint specifies Heins and Bidulka each "personally certified all financial reports during the Class Period."
Upon releasing its second-quarter earnings report to investors, BlackBerry announced a $934 million pre-tax write-down and plans to lay off approximately 40 percent of its workforce.
The claim against BlackBerry states "BlackBerry stock plummeted from a closing price of $10.52 per share on Sept. 19, 2013 to a close of $8.73 per share on Sept. 20, 2013, after experiencing an intra-day low of $8.19 on heavy trading volume."
Further, on Sept. 25, 2013, "as investors digested the bad news, [stock prices] closed at $8.01," according to the complaint.
A statement emailed to CRN from a BlackBerry spokesperson after the lawsuit was filed stated, "We are executing our strategy and continuing to drive adoption of BlackBerry 10 smartphones, BlackBerry Enterprise Service 10 deployment, the cross-platform BBM social messaging service plan, and pursue mobile computing opportunities by leveraging the secure and reliable BlackBerry Global Data Network."
BlackBerry declined to comment on the lawsuit.
PUBLISHED OCT. 7, 2013