From Bad to Worse for the Surface RT: Microsoft Shareholders Sue Microsoft Over Misleading Financial Information
Microsoft’s Surface RT has experienced all sorts of problems since it was first released. The first problem was that people had no idea what it was or why it was different from Windows 8 tablets. The second problem was that there were only a handful of decent apps available at launch. The third problem was that it was initially priced at the same rate as an iPad. The fourth problem was….well, you get the picture.
Things are going from bad to worse for Microsoft with the Surface RT. A New York law firm recently filed a class-action lawsuit against Microsoft on behalf of company shareholders. The long-expected lawsuit claims that Microsoft:
“Made ‘false and misleading’ statements about its financial performance and the Surface RT tablet between April 18, 2013 and July 18, 2013.”
That’s bad. During that time, Microsoft allegedly knew that the Surface RT was experiencing poor customer demand and sales, but refused to share that information with shareholders. Soon after, Microsoft revealed that the Surface RT debacle had cost the company $900 million due to the sheer number of unsold Windows RT tablets out there.
In response, Microsoft dropped the price of the Surface RT by $150 (to a price that it probably should have debuted at in the first place) and also dropped the much more powerful Surface Pro to $900.
This isn’t necessarily devastating for Microsoft. Anytime an unexpected financial loss takes place, lawyers tend to throw suits around. In this case, it’s unclear who will win, but there’s no doubt that the Surface RT – and Microsoft itself – is in serious trouble.