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 U.S. District Judge Thomas Griesa in Manhattan said the plaintiffs
failed to show that BlackBerry and top officials materially misled
them in touting how well customers were accepting the devices, and
failing to take writedowns fast enough when sales proved
disappointing.
Once known as Research in Motion, BlackBerry launched BlackBerry 10
in January 2013 in a bid to recoup market share lost to Apple Inc's
<AAPL.O> iPhone, and Samsung Electronics Co Ltd <005930.KS> devices
powered by Google Inc's <GOOGL.O> Android.
BlackBerry 10 won positive reviews, but low sales led to a projected
$930 million writedown for unsold inventory on Sept. 20, 2013,
causing BlackBerry shares to lose about one-sixth of their value
that day. The Waterloo, Ontario-based company ousted its chief
executive officer, Thorsten Heins, less than two months later.
Shareholders led by Marvin Pearlstein accused BlackBerry in the
lawsuit of overstating how well customers were "embracing"
BlackBerry 10, and manipulating its books by recording revenue too
fast and waiting too long to write off unsold inventory.
Griesa, though, said BlackBerry's optimistic statements "fell far
short" of being legally misleading, adding that "even a poor-selling
device may still be embraced by customers and may still mark a
transition for the company."
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He also said the plaintiffs did not show BlackBerry believed its
accounting practices were wrong when it devised them, and that it is
not enough to show they were wrong only in hindsight.
Lawyers for the plaintiffs and Blackberry did not immediately
respond to requests for comment.
Heins' successor John Chen has overseen a push at BlackBerry to cut
costs, sell assets, and focus more on software and mobile device
management.
The case is Pearlstein et al v. BlackBerry Ltd et al, U.S. District
Court, Southern District of New York, No. 13-07060.
(Reporting by Jonathan Stempel in New York and Euan Rocha in
Toronto; Editing by Lisa Shumaker)
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