August 13th, 2013, 19:08 PM
Microsoft Sued Over 'Misleading' Surface RT Statements
Microsoft has been hit with a class-action suit that accuses Redmond of hiding poor Surface RT sales, which resulted in huge losses for company shareholders.
Microsoft issued "materially false and misleading financial statements and financial disclosures for the quarter ended March 31, 2013," according to the suit, which was filed in Massachusetts district court. "These false and misleading statements materially misrepresented the true financial effect that Surface RT was then having on the company's operations."
Gail Fialkov, a Microsoft stock holder, is listed as the sole plaintiff at this point, but the law firm of Robbins Geller Rudman & Dowd is encouraging others to join the case in the next 59 days.
A Microsoft spokeswoman declined to comment.
The Surface RT tablet debuted in October alongside Windows 8. Last month, Microsoft revealed that Surface revenue was $853 million between Oct. 2012 and June 2013. That might not seem too shabby, but Microsoft recently incurred a $900 million charge for Surface RT inventory adjustments, and boosted advertising costs for Windows 8 and the Surface by $898 million.
The lawsuit, however, said Microsoft knew that its Surface RT was struggling months before that disclosure.
"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 suit said. But Redmond delayed "Surface RT's day of reckoning" until June, which "eviscerated about $34 billion of the company's market value," according to the suit.