HP In Hot Water for Iffy webOS Plans, Sued by Investors
Hewlett-Packard is facing some serious accusations for allegedly misleading its investors about the performance of its webOS mobile operating system, Reuters reported. During its latest earnings call, HP announced plans to spin off its $41 billion Personal Systems Group and stop shipping webOS devices as a part of an effort to boost its low margins.
Representing shareholder Richard Gammel, Rudman & Down filed lawsuit in a central California U.S. District Court against the largest technology company by sales this week. Gammel claims that HP’s top execs, CEO Leo Apotheker and CFO Cathie Lesjak, provided false statements to investors concerning the company’s consumer business, and seeks damages on behalf those who acquired HP shares between November 22, 2010, and August 18.
Specifically, the lawsuit claims takes issue with Mr. Apotheker’s past comments regarding the company’s earnings expectations, the importance of its personal-computer business, and the envisioned role of the webOS mobile operating system it acquired along with Palm Inc., reports the Wall Street Journal.
The reason Gammel sued the company is that Hewlett-Packard’s stock dropped 20 percent following the news of the PSG spinoff. This case does have the potential to trigger even more shareholder uncertainty, and even cause some serious damage further down the road, but proving that Apotheker intentionally mislead investor may be harder than it seems. “It’s a very difficult thing to do,” Reed Kathrein, an attorney at Hagens Berman Sobel & Shapiro told the Wall Street Journal.
Another tech firm that is getting sued these days is Google. Out of 40+ active cases, Oracle’s attack on Android is one of the most notable ones. Oracle CEO Larry Ellison and Google CEO Larry Page will attend a settlement conference on September 19 in a California court to state each of their company’s claims in front Judge Donna Ryu.
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