Microsoft is being sued over "materially false and misleading statements" about the Surface RT tablet's success, or lack thereof, in the marketplace. The lawsuit claims that Microsoft made intentionally fallacious statements in its financial results for the quarter ending March 31, with the failure of the tablet highlighted by the $900 million
Surface RT tablet write-down in the last quarter's earnings report.
The securities class action suit (PDF)
is being filed on behalf of purchasers of Microsoft stock between April 18 and July 18, 2013. The suit, as part of its filing, declares that "prior to the beginning of the Class Period, Defendants led the market to believe that Microsoft's launch of Surface RT had been executed in a measured and conservative fashion so that it could observe and understand its progress and outcome. What Defendants knew, but failed to disclose to investors, however, was that Microsoft's foray into the tablet market was an unmitigated disaster, which left it with a large accumulation of excess, over-valued Surface RT inventory."
The filing goes on to say that the failing of the device in the marketplace is due in large part to the limitations of Windows RT. As a result of the $900 million markdown associated with poor financial results, the stock plunged over $4 per share, removing $34 billion from the company's value in a single day.
Defendants named in the suit are Microsoft CEO Steve Ballmer, former Chief Financial Officer Peter Klein, Corporate Vice President Frank Brod and Executive Vice President of Marketing Tami Reller. Neither Microsoft nor the individuals named have any comment on the suit.