Microsoft shareholders, under the belief they have been misled by the company concerning the progress of the Surface RT have filed a class-action lawsuit in US courts.
Announcements came for the shareholders intended law suit from the legal firm of Robbins Geller Rudman & Dowd Monday stating that a class-action suit has been filed against the Microsoft Company. Shareholders feel that Microsoft misled investors when it neglected to inform them of the terrible sales facing its new ARM-based Surface RT.
Although Microsoft was aware of miserable sales the new tablet was producing, it neglected to release actual numbers to shareholders and investors. Additionally company reports used colorful languages insinuating that the Surface RT was doing well in markets. Shareholders primary complaint is this false and misleading language leaving them in shock when the actual numbers finally released.
The first of this dismaying news came when Microsoft released its fourth-quarter results for fiscal 2013 showing a $900 million inventory adjustment charge on its many unsold Surface RT kits. In an attempt to clear the warehouses of much overstock still remaining for the tablet the device was being sold at a huge markdown, taking as much as $150 off the original retail price.
In late July more information revealed that combined revenue from the Surface RT and Surface Pro just reached the $853 million mark which was considerably less than the charge the company took. The tablet line was officially more than $50 million down in losses and the Surface RT was primarily the blame, despite earlier assurances from Microsoft that the product was doing well.
Shares declined 11.4% on the day of reports releasing, marking Microsoft’s largest one-day decline in over four years. The law firm further announced during a press release that shareholders believe that the company was aware of these losses months prior to the release of reports yet neglected to inform them. This means that not only current shareholders were victims of neglected key information but that any who purchased stock between the dates of April and early July were deliberately misinformed to the Surface RT’s progress.
Such executives as Steve Ballmer CEO, Peter Klein ex-CFO, Frank Brod VP of finance and Tami Reller executive VP of marketing and former windows head are named in the class-action suit as portions of defense along with Microsoft Corporation itself. The bottom line of prosecution is that based on a shareholder faith in the company’s word, individuals in the suit unknowingly paid inflated share prices before date released.
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