According to a press release dated September 13, 2011, the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. As a result of defendants’ false statements, the Company’s stock traded at artificially inflated prices during the Class Period, reaching a high of $48.99 per share on February 16, 2011.
In July 2010, the Company completed its acquisition of a provider of smartphones for $1.2 billion. During the Class Period, defendants represented that spartphone operating system was going to play an integral role in the Company’s strategy going forward, including running on a new line of tablet personal computers as well as on all of the Company’s PCs by 2012.
Then, on August 18, 2011, the Company announced disappointing third quarter fiscal 2011 financial results and issued revised guidance for fiscal year 2011. In addition, it announced several major shifts in its long-term business model, including that it “will discontinue operations for [smartphone operating system] devices....” As news began to leak into the market, on August 18, 2011, the Company’s stock declined $1.88 per share, to close at $29.51 per share. The next day, stock price fell to its lowest level in 6 years, trading as low as $22.75 per share before closing at $23.60.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company’s business model was not working, as the Company was unable to leverage its extensive portfolio and scale of products and services in a strategically beneficial manner; (b) the smartphone operating system devices’ and the PC business were not central to the Company’s business model and operating system would not be integrated across the Company’s entire product line; (c) the tablet hardware was inefficient, limiting the degree of effectiveness of the operating system; and (d) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s turnaround, revenue growth rates, market share, new product introductions, diluted EPS, and the Company’s ability to deliver upon its long-term growth model.
On December 19, 2011, the Court issued an order appointing lead plaintiff and approving the selection of lead counsel.
On February 10, 2012, plaintiffs filed an amended complaint.
On August 29, 2012, the Court issued an Order granting Defendants' motion to dismiss. Plaintiffs were given leave to file an amended complaint. On October 19, 2012, the Plaintiffs filed their amended complaint.
On May 8, 2013, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss. Plaintiffs were given the choice to file an amended complaint.
On March 31, 2014, a Stipulation of Settlement between the parties was entered into the Court's docket. This Settlement was preliminarily approved by the Court on May 2, 2014.
On September 15, 2014, the Court issued a Final Judgment and Order granting final approval of the Settlement. The Court also entered an Order awarding attorneys' fees and expenses.