A Class Action Suit? Yeah, That Will Do Wonders For the Value of Your Nokia Shares …
Nokia’s legal team is going to be busier than usual this summer — suing and being sued. On Thursday, the company — which earlier this week filed patent infringement suits against HTC, Research In Motion and ViewSonic in the U.S. and Germany — found itself on the receiving end of a class action suit brought by an irate shareholder.
Filed by Robert Chmielinski, the suit alleges Nokia misled investors by promising that its transition to Microsoft Windows Phone platform would reinvigorate its flagging smartphone sales.
“Defendants told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not,” the lawsuit states. “This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected. Nokia expected its first quarter 2012 non-IFRS Devices & Services operating margin to fall by 3%, and projected first quarter 2012 Devices & Services net sales of €4.2 billion.”
The lawsuit further alleges that Nokia fumbled the launch of the Lumia 900, shipping it with a glitch that ultimately forced it to offer customers an automatic $100 refund, “making the phone essentially free.”
Which is true, of course. But how ironic is it that a shareholder outraged over the slow pace of Nokia’s nascent transition to Windows Phone is suing the company, a move that will arguably further slow that pace by distracting management and drain away further resources?
And c’mon: the Lumia line isn’t even a year old yet. It debuted in Europe last November.
Robbins Geller, the law firm representing Chmielinski, says it seeks to recover damages on behalf of all purchasers of Nokia’s shares.
Nokia, for its part, says it will defend itself against the suit, whose allegations it believes to be “without merit.”