Shareholders are headed to a fresh lawsuit against HP for not letting them know about the plans to dump WebOS and also about the spin off of HP’s hardware business. According to Reuters a shareholder has launched a class-action claiming that HP and top executives misled investors for months before telling anyone that it was going to kill off the TouchPad or turn into a software company.
The shareholders said that HP hid the fact that its business model was not working and WebOS was no longer what the market wanted. HP also hid the fact that the acquisition of Palm did more harm than good for the company. Shares of the company plunged 20 percent after the outfit announced its plans, marking its biggest single-day drop since the Black Monday stock market collapse of 1987.
The class-action filed this week in a U.S. District Court by Robbins Geller Rudman & Down accuses HP executives, including CEO Leo ‘Action Man’ Apotheker and CFO Cathie Lesjak of misleading investors by making positive statements about the company’s performance. The lawsuit is focused on recovering the losses and unspecified damages of anyone who bought into HP between November 22, 2010, and August 18 of this year. Gammel argues that the lack of disclosure about potential problems means its shares were artificially inflated.