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Microsoft sued over disastrous Surface sales

It’s not hip to be rectangular
Wed Aug 14 2013, 15:41
Microsoft Surface with Touch Cover

TABLET UPSTART Microsoft is being sued by stockholders who believe that the company misled them about Surface sales.

Law firm Robbins Geller Rudman & Dowd filed the class action lawsuit. The complaint alleged that Microsoft breached Securities and Exchange Commission rules by failing to disclose that "Microsoft's foray into the tablet market was an unmitigated disaster".

"The complaint charges Microsoft and certain of its officers with violations of the Securities Exchange Act of 1934," the law firm said in a release.

"Plaintiffs seek to recover damages on behalf of all purchasers of Microsoft common stock during the Class Period (the 'Class')."

The claim is that Microsoft purposefully misled its investors, and the complaint alleged that Microsoft misrepresented the truth by making "materially false and misleading statements".

The lawsuit lists a number of "adverse facts" that it claims Microsoft brushed under the carpet during the Class Period between 18 April and 18 July this year.

Those adverse facts relate to Surface tablet sales, which Microsoft later admitted had led to a charge of $900m.

"Defendants issued materially false and misleading statements regarding the Company's financial performance and its tablet computer, the Surface RT," the complaint said.

"The Company's Surface RT product was experiencing poor customer demand and lackluster sales... Surface RT inventory experienced a material decline in value during the quarter ended March 31, 2013... financial statements for the quarter ended March 31, 2013 were materially false and misleading and violated Generally Accepted Accounting."

Microsoft is also accused of lacking "a reasonable basis for their positive statements about [the] Surface RT".

The complaint is available (PDF). We've asked Microsoft to comment on the lawsuit, but so far it has not responded. µ

 

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