Research In Motion (RIM), the maker of the popular Blackberry smartphones, recently announced a new CEO and also a delay in their next generation smartphones. Since their peak around June 2008, RIM shares have shed 95% of their value and only last month, the company reported a quarterly loss of $518 million. However, the worst possible news that could have come from the company was that the next line of phones which would determine its future might be delayed. However, RIM might have bigger problems awaiting it than listening to shareholders at annual meetings. According to legal experts in the business, it is possible that recent optimistic comments from the company’s CEO might attract undue attention and lead to lawsuits.
According to experts from competing companies, RIM should be sued because the CEOs remarks that there is nothing wrong with the company are not just reckless but also wrong and baseless. Despite reporting losses in June, the CEO, Mr. Thorsten Heins went publicly stating in affirmative about the company’s health. This was a public relations move by RIM to try and quell the thought among investors that it was on the decline.
As a retort to several suggestions made by interested parties that RIM has misled investors about the future, the company said that RIM is well within the legal boundaries that require it to provide transparency in its actions. In fact, the company had stated that it was expecting a loss in revenue this quarter and even alerted shareholders about it towards the end of May.
RIM operates out of Canada and is also traded in the USA and there are legal differences between the two countries. However, laws in both places require companies to inform shareholders of events likely to affect the stock. The delay in Blackberry 10 devices constitutes such a change and legal experts believe that this might lead to nasty courtroom battles for RIM. If a class action suit is filed against the company and the CEO, they will merely have to show that despite being aware of delays, Mr. Heins made statements suggesting that everything was good in RIM and that the future was bright. The CEO is now stating, at recent presentations and conferences, that the Blackberry 10 devices will be ready by the end of the year.
