Microsoft facing lawsuit for failing to declare Surface RT as ‘unmitigated disaster’

Microsoft facing lawsuit for failing to declare Surface RT as ‘unmitigated disaster’If you thought the ill-fated Microsoft Surface RT had done all the damage it was destined to do, well, think again.

Following news of that $900 million hit on unsold units, we’re told that Microsoft is facing a class action lawsuit for failing to alert shareholders just how bad things were with the Surface RT.

As reported on AllThingsD, law firm Robbins, Geller, Rudman, & Dowd asserts that Microsoft failed to abide by generally accepted accounting principles, and - in addition - Securities and Exchange Commission rules.

“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,” reads the suit.

“Defendants’ materially false and misleading conduct enabled Microsoft to forestall Surface RT’s day of reckoning and delay what would be tantamount to an admission by the Company that its all-important entry into the tablet market had been a failure.”

Ouch. Both models of the Microsoft Surface (that’s the RT and the Pro) have seen price cuts in the past month or so, and CEO Steve Ballmer recently conceded: "We built too many." Which, let's face it, is really just another way of saying no one was buying them.

That admission comes too late for Robbins, Geller, Rudman, & Dowd, which is looking to recover damages for those who bought Microsoft common stock between April 18 and July 18 this year.

Read more about: Microsoft Surface ProMicrosoft Surface RTWindows 8

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6 comments

satchef1  Aug. 15, 2013 at 18:14

Am I the only one who thinks this is an odd concept? Yankee law again?

JanSt / MOD  Aug. 15, 2013 at 18:50

No

Stolin23  Aug. 15, 2013 at 19:54

Firesale inbound!

grendinn  Aug. 15, 2013 at 22:01

Recently tried the RT and it is really impressive, MS marketing on the device made no sense and they are only now pushing and selling it as they should of done in the first place.
If it goes Under £200 at retail it will be a bargain and they will shift plenty.

JanSt / MOD  Aug. 15, 2013 at 22:20

Recently tried the RT and it is really impressive, MS marketing on the device made no sense and they are only now pushing and selling it as they should of done in the first place.
If it goes Under £200 at retail it will be a bargain and they will shift plenty.


€320 in a local PC store here in Ireland (£270-ish) - I asked: offer's been on for 2 weeks. Sold? ZERO. £200 might do it, but I doubt MS would allow sub-netbook pricing... They have a, cough, reputation.

satchef1  Aug. 16, 2013 at 00:25

At that price when it first launch, they probably would have sold a good number. Right now there's no buzz and Surface is just another old, discounted tablet. Only things that will bring volume are a 'fire sale' or a new model at a sensible price.

TBH I can see a £199 8" and a £299 11", with no fire sale on the original. At the price they are selling to educational establishments, they will likely clear all the stock eventually without cannibalising the second attempt.

I guess one good thing came out of attempt one. RT has been so disastrous that no OEM is likely to care much if Microsoft do target Nexus pricing next time out.

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