Robbins Geller Rudman & Dowd today announced that a class action has been commenced in the United States District Court for the District of Massachusetts on behalf of purchasers of Microsoft Corporation common stock during the period between April 18, 2013 and July 18, 2013.
CEO Steve Baller, Former CFO Peter Klein, Tami Reller, and Frank H. Brod are personally named in the suit.
The complaint charges Microsoft and certain of its officers with violations of the Securities Exchange Act of 1934. Microsoft is the world’s largest software company, primarily as a result of its near-monopoly on Windows personal computer (“PC”) operating system software and its Microsoft Office collection of productivity programs.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and its tablet computer, the Surface RT. Specifically, defendants misrepresented and failed to make public the following adverse facts:
- (i) that the Company’s Surface RT product was experiencing poor customer demand and lackluster sales;
- (ii) that the Company’s Surface RT inventory experienced a material decline in value during the quarter ended March 31, 2013;
- (iii) that the Company’s financial statements for the quarter ended March 31, 2013 were materially false and misleading and violated Generally Accepted Accounting Principles and Microsoft’s publicly disclosed policy of accounting for inventories;
- (iv) that the Company’s Form 10-Q for its third quarter of 2013 failed to disclose then presently known trends, events or uncertainties associated with the Surface RT product that were reasonably likely to have a material effect on Microsoft’s future operating results; and
- (v) that based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s Surface RT product during the Class Period.
On July 18, 2013, Microsoft issued a press release announcing its financial results for the fiscal 2013 fourth quarter and year end, the periods ended June 30, 2013. For the quarter, the Company reported revenue of $19.9 billion and net income of $4.97 billion, or $0.59 per share. The Company’s results for the quarter were adversely impacted by a $900 million inventory charge, or an amount equal to $.07 per share, related to Surface RT “inventory adjustments.” On this news, Microsoft common stock suffered its biggest price decline in more than four years, plunging $4.04 per share, or 11.4%, on very heavy trading volume to close at $31.40 per share.
Plaintiffs seek to recover damages on behalf of all purchasers of Microsoft common stock during the Class Period (the “Class”). The plaintiffs are represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Read the full complaint here (pdf): http://www.rgrdlaw.com/media/cases/221_Complaint.pdf
In my personal opinion, this looks like a quick way for the law firm to make some money and this suit will be settled quickly. I do not think Microsoft did anything wrong here. If you own MSFT stock, join the lawsuit you may make a little money.
Source: Business Wire