Nokia may be busy suing the likes of RIM, HTC, and Viewsonic over the infringement of a long list of wireless patents, but the Finnish company should watch their backs — now they’re the target of a class-action lawsuit from a shareholder because their plan to embrace to Windows Phone hasn’t yielded the right results.
But are they concerned about it? Not if their official statement on the situation is any indication — Nokia has just reached out to say that they are “reviewing the allegations contained in the complaint and believes that they are without merit. Nokia will defend itself against the complaint.”
If you hadn’t yet heard the details, plaintiff Robert Chmielinski filed the suit yesterday [PDF] in U.S. District Court in New York, in which he alleges that Nokia knowingly misrepresented how well the transition to Windows Phone was playing out to their investors. More specifically, it says that “defendants told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not.”
The complaint goes on to point out that despite all of the positive spin Nokia CEO Stephen Elop and CFO Timo Ihamuotila put on the company’s various Lumia launches, those claims fell apart when the company announced on April 11 that their Q1 2012 financials would be much weaker than expected. That announcement was followed by pronounced dip in Nokia’s stock price, which affected “thousands” of Nokia’s shareholders.
Oh, but there’s more:
“[Nokia] also disclosed a glitch in its newest Windows offering – the Lumia 900. Nokia had to immediately offer customers an automatic $100, making the phone essentially free.”
For what it’s worth, Nokia also handled those Lumia 900 connectivity issues much better than I’d expected. They owned up to the problem, laid out a plan to fix it, delivered that fix ahead of schedule, and sweetened the deal for anyone who could have possibly been affected. Whether or not Nokia knew about the glitch prior to launch is a question that we may never get a clear answer on (though I’m inclined to say no, considering how much was at stake for that launch), but as far as that complaint goes that’s the least of Nokia’s issues.
Were Elop and Ihamuotila just being corporate cheerleaders, or were they engaged in a plan to willfully deceive and defraud their shareholders? Though Nokia definitely feels the execs fall into the former, I’ll be keeping my eyes on this for the long haul. Only time will tell how much steam the suit will pick up though — investors interested in taking up the role of the lead plaintiff have until July 2 to file the appropriate motion.