Blackberry Gets Slapped with 2nd Lawsuit, Asks Shareholders to Hold On
For the second time in the past week, embattled Canadian telco firm Blackberry has received another round of lawsuit. On Tuesday, Blackberry shareholders in Quebec filed a class-action lawsuit against the company, alleging the company has been taking them for a ride by issuing statements that only allude to false hopes.
Filed in Quebec Superior Court, the lawsuit said the Waterloo-based smartphone pioneer "knowingly or negligently misrepresented" its financial position. The Blackberry shareholders represented in the lawsuit were Canadian shareholders who bought the company's shares from September 27, 2012 to September 20, 2013.
"For almost a full year, BlackBerry management made market statements based on prophecy rather than fact," Tony Merchant, class-action lawyer, said in a statement.
"Thousands of Canadians who invested in BlackBerry Limited in the past year have lost hundreds of millions of dollars."
Shareholders represented in the latest lawsuit demand are seeking US$900 million in damages from the company.
Shareholders further blasted the Canadian telco firm for deliberately misleading consumers about the BlackBerry 10 line of smartphones.
"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 Manhattan-based complaint stated.
On its Web site, Blackberry posted an open letter and appealed for sobriety from its consumers and shareholders.
"These are no doubt challenging times for us and we don't underestimate the situation or ignore the challenges we are facing. We are making the difficult changes necessary to strengthen BlackBerry," the letter stated.
"One thing we will never change is our commitment to those of you who helped build BlackBerry into the most trusted tool for the world's business professional."
BlackBerry, with share prices nose-diving to below $9 recently from a 52-week high of $17.80 in January, said that despite the financial turmoil it is currently in, it still has a number of reasons why it strongly believed it will be able to stage a strong come around.
"We have substantial cash on hand and a balance sheet that is debt free... [and] we are restructuring with a goal to cut our expenses by 50 per cent in order to run a very efficient, customer-oriented organization."
Apart from Fairfax Financial Holdings which has tendered a $4.7 billion offer to acquire all of BlackBerry, the Canadian telco firm has been reportedly in talks with tech giants Cisco, Google, SAP, LG as well as Intel.