Class action suits filed against HP over webOS, earnings 70
Things haven’t exactly been pretty in webOS land. HP’s still working on the software, but they’re done with the hardware and are privately shopping the OS around to anybody who will take it – but nobody seems interested. Meanwhile, the webOS user and developer community is caught between the old world and the great unknown future, suffocating in the space in between. webOS users have gotten used to taking it on the chin, complaining loudly, and the eventually shrugging it off as just another day.
Lawyers, however, don’t do that. They file lawsuits when they’re in anguish, because well, that’s what lawyers do. And that’s what lawyers are doing towards HP. At least two law firms – Briscoe Law Firm and Powers Taylor LLP and Robbins Geller Rudman & Dowd LLP – have filed class action lawsuits against the Palo Alto-based tech giant, alleging that the company violated SEC disclosure rules by producing misleading statements about HP’s potential for revenue, marketshare, and product intros as related to webOS. From the Briscoe Law filing:
“It has been alleged that during the Class Period, HP and certain of its officers and directors made materially false and misleading statements or failed to disclose material information related to the company's business and operations in violation of the Securities Exchange Act of 1934. Specifically, it is claimed that HP and the other defendants misrepresented and/or failed to disclose the following adverse facts: (a) HP's business model was not working because the company was unable to leverage its extensive portfolio and scale of products and services in a strategically beneficial manner; (b) webOS, the TouchPad and the PC business were not central to HP's business model and webOS would not be integrated across Hewlett-Packard's entire product line; (c) the TouchPad hardware was inefficient, limiting the degree of effectiveness of the webOS operating system; and (d) based on the foregoing, defendants lacked a reasonable basis for their positive statements about HP'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. As a result of these alleged false statements, HP's stock traded at artificially inflated prices during the Class Period, reaching a high of $48.99 per share on February 16, 2011.”
As with all class action lawsuits, there’s a great potential reward for the litigator, and should there be a payout or settlement, the amount that makes it to the aggrieved parties (in this case the HP shareholders) would likely be a pittance compared to how much they’ve lost due to HP’s actions. We’re not lawyers here (okay, Jonathan is), so we can’t really judge there’s much of a case here, especially without hearing HP’s side and seeing the relevant documentation. Either way, we’re surprised it took this long to see the suits come to fruition.