Faruqi & Faruqi, LLP, a national law firm concentrating on investor rights, consumer rights and enforcement of federal antitrust laws, is investigating potential wrongdoing at Research In Motion Limited (“RIM” or the “Company”) (NasdaqGS: RIMM). Faruqi & Faruqi, LLP seeks to determine whether RIM violated federal securities laws in connection with statements made to the Company’s shareholders.
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The investigation focuses on whether certain individuals violated federal securities laws by, among other things, failing to disclose that: (1) the Company’s aging product line and inability to introduce new products to the market was negatively impacting the Company’s business and margins; (2) the Company was unable to introduce new products in a timely manner, which hurt the Company’s ability to maintain its market share in the smartphone market; (3) the Company’s resources had become limited as it attempted to develop new products; (4) the Company experienced lower-than-expected Blackberry smartphone sales and shipments in the United States and Latin America; and (5) the Company relied on sales of older-model smartphones at lower retail price points than their newer, but delayed, products.
On March 24, 2011, the Company announced disappointing guidance and financial results from the fourth quarter and fiscal year 2011, which caused the price per share of RIM common stock to drop 11.2% on March 25, 2011. On April 28, 2011, RIM updated its first quarter 2012 guidance with lower earnings per share (“EPS”) estimates than what was projected the prior month, which the Company attributed to lower shipment volumes of Blackberry smartphones. In response to the bad news numerous analysts downgraded RIM. On June 18, 2011, shares of RIM dropped another 21.5% to $27.75 (its lowest price since September 12, 2006) after revealing quarterly revenue might drop for the first time in nine years.