Richard Gammel, a Hewlett-Packard Co. shareholder, has filed suit against the company. HP, the world’s largest technology company, is accused of concealing the fact that its existing business model was not working and that webOS — the operating software it inherited after buying Palm — was no longer central to its business model. On Aug. 18, the U.S. tech giant announced that it was considering a spinoff of the world’s largest PC business, killing off webOS devices such as the TouchPad, and buying British software company Autonomy Corp. for $12 billion. The lawsuit seeks class action status.
Shares of the company fell 20% the following day, marking their biggest single-day drop since the Black Monday stock market collapse of 1987. The lawsuit, filed in U.S. District Court, accuses HP executives, including CEO Leo Apotheker and CFO Cathie Lesjak, of misleading investors by making positive statements about the company’s performance that later proved unfounded. The lawsuit seeks to recover unspecified damages on behalf of any who bought into HP between November 22, 2010, and August 18th of this year, arguing that the lack of disclosure about potential issues means its shares were artificially inflated.
Source: Insurance Journal
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