BlackBerry accused of inflating stock

A shareholder of BlackBerry Ltd sued the company and executives on Friday, accusing them of inflating the stock price by painting a misleadingly rosy picture of the prospects of its BlackBerry 10 smartphone line.

Ontario-based BlackBerry, formerly Research In Motion, misled investors last year by saying the company was “progressing on its financial and operational commitments”, and that previews of its BlackBerry 10 platform were well received by developers, according to shareholder Marvin Pearlstein in a lawsuit lodged in Manhattan federal court.

Pearlstein is seeking to represent a class of thousands of shareholders who bought stock between Sept 27, 2012, when the company touted its strong financial position, and Sept 20 of this year, when it revealed it would have to write down $930m to $960m related to unsold BlackBerry 10 devices, according to the lawsuit. “In reality, the BlackBerry 10 was not well-received by the market, and the company was forced to lay off about 4,500 employees, totalling 40% of its total workforce,” the complaint alleges.