Investors sue Microsoft, say they were misled regarding poor-selling Surface RT
Aug 13, 2013, 1:05 PM | Updated: 1:14 pm
It’s well known Microsoft’s Surface RT tablet has been a dud. Now some shareholders are suing the company, claiming it misled investors about how poorly the iPad competitor was selling.
A New York law firm filed the class action suit Tuesday. Robbins Geller Rudman & Dowd LLP claims that Microsoft made “false and misleading” statements about Surface RT, knowing customer demand was lackluster.
Microsoft basically wrote off the Surface RT in July, taking a $900 million charge against earnings and slashing the price by $150. That news led Microsoft stock to plummet more than 11 percent.
The lawsuit names CEO Steve Ballmer, Former CFO Peter Klein and several other current and former officers.
“What Defendants knew, but failed to disclose to investors […] was that Microsoft’s foray into the tablet market was an unmitigated disaster, which left it with a large accumulation of excess, over-valued Surface RT inventory,” the lawsuit says.
The suit accuses Microsoft of failing to disclose a “large excess of Surface RT inventory,” which enable Microsoft to “forestall Surface RT’s day of reckoning and delay” which would essentially be an admission that “its all-important entry into the tablet market had been a failure.”
Microsoft is refusing comment on the suit.
