Marvin Pearlstein, a BlackBerry Ltd. shareholder, sued the company after it announced losses of over $930 million with a write down due to unsold BlackBerry 10’s.  Pearlstein accused the company of inflating stock prices and misleading investors into believing that the new smartphone line was going to be successful.  BlackBerry’s share value dropped 24%, from $10.52 to $8.01within 5 days of the announcement of the write down.

Pearlstein does not have the right to accuse BlackBerry for misleading investors.  In September 2012, BlackBerry was in a very strong financial position as their past products had been very successful; however, due to popularity of competing brands, such as Samsung and Apple, BlackBerry’s sales dropped.  BlackBerry did not intend to create an unsuccessful line.  Prior to investing, the investor should be aware of the numerous amounts of risks that are related to making an investment into a company.  According to the article, people invest in hopes of generating more money; however, there are always risks.  When making an investment, there is never a guarantee that the investor will receive a return.  Investments into companies are made based on speculation; therefore, the investor should accept the fact that he made a bad investment.

http://www.cbc.ca/news/business/blackberry-hit-with-shareholder-lawsuit-1.1913852

http://www.theglobeandmail.com/report-on-business/blackberry-hit-with-securities-shareholder-class-action/article14713440/

https://www.youtube.com/watch?v=nUsRChAmtQ0

https://www.youtube.com/watch?v=FsuzZitg83c

           Over the past twenty years, Olympus, has been falsifying financial statements. The cover up of their financial losses was exposed in 2011, when Olympus’s newly hired Chief Executive, Michael Woodford, questioned the company’s accounting transactions. On September 18, 2013, Olympus’s accountant, Chan Ming Fon, admitted to providing false information to the auditor regarding the company’s financial investment portfolios.

A company’s failure to provide truthful statements regarding a company’s financial status is recognized as fraud.  As reference to the readings, financial statement fraud is a serious issue. Over the last six years, Chan has been liquidating Olympus’s assets “to repay an undisclosed loan”.  Chan’s motive for providing misleading information was to hide the company’s huge financial loses from investors.  Before an investment is made, an investor looks at the company’s balance sheet. Investors will sell their shares and no longer invest if the company is in debt. Because Chan provided false information to hide the company’s losses, the auditor overrated the company’s net worth.  Despite the fact Olympus was successful in 2010 and 2011, the recent exposure of the cover up may cause the complete decline of the company, as the company may be removed from the Tokyo stock exchange.  

Crook, Jordan. “Down From Olympus: What’s Going On At The Beleaguered Camera Company?” TechCrunch RSS. N.p., 7 Dec. 2011. Web. 07 Oct. 2013.

Vaughan, Bernard. “Olympus Accounting Fraud.” Reuters. Thomson Reuters, 18 Sept. 2013. Web. 07 Oct. 2013.

In contradiction to Justin, Xiaomi has the potential to be a successful competitor outside of Asia.  Within the past year, Xiaomi sold over 7.2 million phones in Asia; this is equal to 5.7% of the iPhones sold globally.  The phone’s price is 50% less than the iPhone, making it very desirable.  Its great success in Asia demonstrates its ability to compete globally against companies such as Samsung and Apple.

Justin argues that Xiaomi cannot succeed in the Western and European market because it originated in Asia, it is not globally known, and it is too costly to distribute.  This argument can be contradicted as Samsung, which is now a global company, also originated from Asia.  Xiaomi is a young company and has not branched out beyond Asia; hence it is not a globally known and the fact that the Mi-3 can be sold for 43% of the iPhone will allow it some room to increase the price to allow for distribution costs.

Overall, Xiaomi is a very popular, young, rapid growing company that manufactures a product similar to the iPhone.   It currently only sells it products in Asia, however given it’s rapid growth and success; it can also be a successful competitor in the Global market.

https://www.youtube.com/watch?v=3v5sPFw2NPE

(2013, September 14). Taking a bite out of the Apple. The Economist. http://www.economist.com/news/business/21586344-xiaomi-often-described-chinas-answer-apple-actually-quite-different-taking-bite-out