Class-action Suit Filed Against Microsoft Over Surface Write Off

New submitter used2win32 writes with news that at least one investor is unhappy with the Surface inventory write off, claiming that Microsoft mislead investors who purchased stock during Q2 and Q3 by not announcing just how slow inventory was moving at the time "The class action lawsuit claims false and misleading information regarding sales performance of Windows RT based tablets. Microsoft has earned a U.S. $900 million write off and a market share of less that 1% to show for its Windows RT endeavors. Asus, Lenovo, HP, Samsung and HTC discontinued their models leaving Dell as the only OEM producing a Windows RT tablet."

Comments

How does this help anyone?

[Anonymous Coward]

Stockholders win the lawsuit and each get 10 bucks. Microsoft stock takes a huge hit. Stockholders lose a lot more than 10 bucks.

Nevermind, I forgot about the lawyers. The lawyers always win.

Re:How does this help anyone?

[Anonymous Coward]

Actually, you have a good point. The suit was probably started by a lawyer and not by a "real" plaintiff. But if we are going to start suing businesses for poor business decisions and a little bit of lying - hell, there are a LOT of businesses that need suing. I would estimate that at, well, every one of them.

Re:How does this help anyone?

[gl4ss]

...by showing them that they can't just do any shit they want?

if you didn't see this coming the day they announced the writeoff on their report then you weren't thinking. huge advantage to insiders, hugely misleading to investors. almost a billion dollars, they knew they were going to write it off and by the rules they should have announced it. you can't with a straight face say that they expected to sell off the inventory in the last month...

it's a shame the sec didn't penalize them straight away.

Re:How does this help anyone?

[Bert64]

When it comes to poor business decisions, it's ultimately for the shareholders to decide amongst themselves if they want the business they own to be operated by people who make such poor decisions. And if you're only a minor shareholder and the other larger shareholders don't agree with your position then that's that. You knew this *before* you bought these shares, and still decided to buy. Buying shares is gambling, if it doesn't pay off them you have only yourself to blame.

When it comes to lying however, those responsible should be held criminally accountable. Lying in order to secure investment (ie to make your shares appear worth more than they should be and get people to buy them) is fraud and should be treated as such.

As to wether the business decisions were really poor, the problem here is that far too many shareholders are taking a short term view - they want profits NOW and don't care about the long term viability of the company. The fact is MS may currently be highly profitable, but the majority of that profit comes from mature and declining markets, and eventually that source of revenue is going to dry up, and if they have nothing ready to replace it then they will end up bankrupt.

They have generally shown themselves to be rather incompetent at entering new markets, with products that are mediocre to poor and in many cases refusing to fully embrace the new market for fear of getting too far away from traditional markets, and thus being held back. The only real advantage they have is huge cash reserves allowing them to keep slinging enough mud until some of it sticks.

Summary: My bad judgement is your fault

[bradley13]

Typical sue-happy mentality of the USA: My bad judgement is your fault.

If these people had made money with the stock, do you think they'd be offering to pay Microsoft part of their profits?

Re:Summary: My bad judgement is your fault

[RogueyWon]

You're probably right, but...

It's shocking how little effort shareholders in the tech sector are willing to put into scrutinising the products of the companies they are investing in and asking the crucial question: "how many people are going to pay money for this?"

We saw it back in the first dotcom bubble - investors ploughing money into businesses which had no plausible path towards generating substantial revenues, let alone turning a profit.

We've seen it with social networks whose business plan boiled down to "erm... advertising?".

God knows we've seen it in the video gaming sector, where all investors seem to want to here is the appropriate catchphrase, which, depending on the year in question might be: "the next World of Warcraft", "the next Call of Duty" or "free to play with microtransactions". This usually results in a lemming-like dash towards bankrupcy unless the company in question is one of the industry giants.

And now we've seen it with a "next iPad" tablet.

Seriously, is it that hard to look at the product line of the company you're investing in and ask yourself "can I imagine any significant number of people parting with their cash for this?".

Oh, and look at their marketing strategy as well. If it involves breakdancing, that's probably a bad sign.