* Suit alleges company misled investors on financial
* CEO Heins, CFO Bidulka also named as defendants
* Company accepted $4.7 billion tentative offer from Fairfax
By Nick Brown
NEW YORK, Oct 4 A shareholder of BlackBerry Ltd
sued the company and its executives on Friday, accusing
them of inflating the stock price by painting a misleadingly
rosy picture of the business prospects of its BlackBerry 10
Waterloo, Ontario-based BlackBerry, formerly Research In
Motion Ltd, 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
Pearlstein is seeking to represent a class of "thousands" of
shareholders who bought stock between Sept. 27, 2012, when the
company touted its strong financial position, and Sept. 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 percent 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 Inc and Google Inc. It accepted a
tentative offer of $4.7 billion from Fairfax Financial Holdings
Several sources close to the matter told Reuters the company
is in talks with Cisco Systems, Google and SAP
about selling all or part of itself. BlackBerry has
also asked for preliminary expressions of interest from Intel
Corp and Asian companies LG and Samsung
by early next week. Cerberus Capital
Management was reported to have expressed such interest on
According to the lawsuit, the write-down announced on Sept.
20 sent stocks reeling, with share price dropping 24 percent,
from $10.52 on Sept. 19 to $8.01 on Sept. 25. The 35-page
complaint asserts two violations of the Securities and Exchange
Act of 1934.
It is not the first time BlackBerry has been in trouble with
investors. A judge threw out a 2011 lawsuit by a proposed class
of stockholders who said the company misled them about the
prospects of its then-new line of tablet and other products. The
plaintiffs in that case have appealed the decision.
The latest lawsuit is Pearlstein et al v. BlackBerry Inc et
al, U.S. District Court, Southern District of New York, No.