An article I read in the Globe and Mail ties directly with many of the topics we have discussed in class. “BlackBerry hit with securities shareholder class action” is about exactly what the title suggests. Blackberry is being sued by one of its shareholders for allegedly “inflating” stock prices by making its financial situation seem to look better than it was in reality.
Last class, we discusses financial statements and fraudulent financial reporting, where members of a business tweak the numbers when reports assets or liabilities usually in order to make the company look better in the eyes of the public, and therefore, raise its perceived value. Although there is no evidence of fraud in their finances, they are in hot water for mislead potential stockholders, still however, a potential violation of the ‘Securites and Exchange Act of 1934’ according to shareholders.
Last year, when the BlackBerry 10 line was being showcased, many people who bought stocks felt that they were being misled after BlackBerry 10 flopped in its release. Since then, BlackBerry has been struggling to remain competitive, has reduced its workforce considerably, and its share price has dropped a great deal.
Whether or not BlackBerry is guilty of misleading shareholders, the company is still in big financial trouble and will have to go great lengths if it is to remain competitive in the market.
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