Newman Ferrara LLP announces that a class action lawsuit has been filed in the Unites States District Court, Southern District of New York against BlackBerry Limited (NASDAQ: BBRY) (“BlackBerry” or the “Company”) and certain of its executive officers, alleging violations of federal securities laws.
Investors who purchased BlackBerry securities between September 27, 2012 and September 20, 2013 (the “Class Period”) may apply with the Court to be appointed Lead Plaintiff no later than December 3, 2013. The Lead Plaintiff will direct the litigation on behalf of the other class members.
As alleged in the Complaint, BlackBerry and certain of its officers made a series of materially false and misleading statements and omissions related to the Company's business and operations in violation of the Securities Exchange Act of 1934. In particular, it is alleged that BlackBerry actively misled investors about the success and financial prospects of its new BlackBerry 10 line of smart phones and claimed falsely that the line would herald in the Company’s financial recovery. However, unbeknownst to investors, the introduction and poor market reception of the BlackBerry 10 line was actually further hurting the Company’s business, operations and financial situation.
On September 20, 2013, BlackBerry admitted finally that it would incur massive charges due to unsold BlackBerry 10 inventory. According to the Company’s release:
“[BlackBerry] expects to report a primarily non-cash, pre-tax charge against inventory and supply commitments in the second quarter of approximately $930 million to $960 million, which is primarily attributable to BlackBerry Z10 devices.”
To make matters worse, the Company further announced it is preparing for deep staff cuts of up to 40% of its employees by year end.
As a result of these disclosures, BlackBerry stock plummeted from a closing price of $10.52 per share on September 19, 2013, to a close of $8.73 per share on September 20, 2013. Thereafter, BlackBerry shares continued to slide on heavy trading volume as investors liquidated their positions.