BlackBerry Wins Shareholder Lawsuit Appeal

BlackBerry saw a win in a lawsuit brought by shareholders. Is this legal battle over?

When BlackBerry introduced BB10 to the world, they brought a mobile OS that was different and better than any other mobile OS in the market. Knowing this, they brought out two phones, the BlackBerry Z10 and Q10 with the expectations that these phones would do something they did not. Sell.

Much to the chagrin of BlackBerry lovers the world over, the initial BlackBerry Z10 and Q10 were sales failures. BlackBerry had the supply, but didn’t have the demand, and in September of 2013 was forced to take a markdown of nearly $1 Billion on unsold stock. This resulted in BlackBerry shares to suffer a huge loss which left their value at about one sixth their previous value. This also set the ball rolling for a lawsuit.

A lawsuit was brought by shareholders against BlackBerry claiming that BlackBerry fraudulently inflated their stock price. The arguement was that BlackBerry had attempted to conceal the poor performance of these devices from their shareholders in order to maintain stock prices. After winning the initial case, the case was appealed in the Second U.S. Circuit Court of Appeals in New York. The three judge appeal panels struck down the appeal, stating that the complaint amounted to “fraud by hindsight”. BlackBerry would have needed to know that the devices would be unsuccessful from the outset in order for the complaint to hold true.

Unfortunately, the appeals court have left another avenue should the shareholders wish to continue their lawsuit. The lawsuit as it stands is over, however, the appeals court counceled the plaintiffs that they could try to persuade the lower court to allow them to amend their complaint. In the time since the markdown, BlackBerry has changed it’s executive team. John Chen has taken the helm and has completely changed the direction of the company. BlackBerry has gone from a beleagured phone manufacturer to a growing software company. This growing software company is unmatched in their offerings, and finally, it is starting to show.

The stock market is a game. Sometimes you win. Many times you lose. There are no guarantees, especially in technology stocks. Did BlackBerry know that they would be losing by introducing the Z10 and the Q10? I don’t believe so. And I believe their actions since that time show that they have no intention to lose like that again. It might be time for these shareholders to step back from the lawsuits and allow BlackBerry to bring those stock prices back to what they were.

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Brad

BlackBerry Elite Founder & Owner of UTB Blogs and UTB Geek. When I'm not talking or writing about BlackBerry, you'll find me using my BlackBerry.

  • Nayalm

    Excellent article
    Z10 & Q10 was and still IS the gigantic advancement in the smartphone industry!
    What the shareholders and the rest of the world don’t want to admit is BlackBerry(RIM) and its product BlackBerry10 got stabed in the back numerous times by CrApple, Google, Facebook, major app developers and then left it to the media and tech sites/bloggers to TWIST THE KNIVES!!!
    I don’t hold any grudge against Thoresten Heins, Jim Balsillie or even Mike Lazaridis and Doug Fregin because to this day can anyone bring 1/4 of the capabilities of BB10 Z10/Q10 to the table? ABSOLUTELY NOT! Unless it’s the BB10 Z30/Classic/Passport.

  • Chaplain_Clancy

    Yeah, I can’t see stock prices increasing if revenues get eaten up in legal expenses brought on by those who want the stock prices to increase.

  • Jope28

    I hope Apple pays for trying to have it both ways.

    But at the same time, I think the EU is dangerous. Thinking that they can overrule the sovereignty of one of its member countries like that.
    IMO, This should’ve been dealt with and resolved by the U.S. and Ireland with the fine being paid to the US.

    No wonder Brexit was a success. The EU is like colonizing for the new century lol

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