(MENAFN- Khaleej Times) A shareholder of BlackBerry sued the company and its executives, accusing them of inflating the stock price by painting a misleadingly rosy picture of the business prospects of its BlackBerry 10 smartphone line.
Waterloo, Ontario-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 lodged in Manhattan federal court.
Pearlstein is seeking to represent a class of "thousands" of shareholders who bought stock between September 27, 2012, when the company touted its strong financial position, and September 20 of this year, when it revealed it would have to write down between $930 million and $960 million related to unsold BlackBerry 10 devices, according to the lawsuit.
"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 per cent of its total workforce," the complaint alleges. In addition to BlackBerry, chief executive Thorsten Heins and chief financial officer Brian Bidulka are named as defendants. A spokeswoman for BlackBerry declined to comment.
BlackBerry put itself on the block in August after bleeding market share to other smartphone makers over the past few years, namely Apple and Google. It accepted a tentative offer of $4.7 billion from Fairfax Financial Holdings last month.
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