Tomahawk, WI 10/23/2013 (BasicsMedia) – BlackBerry Ltd (NASDAQ:BBRY)’s market cap now stands at $4.18 billion. This is quite low compared to other companies that emerged later but have grown into powerhouses in the tech industry. BBRY has been overtaken by companies such as Nokia Corporation, with a market cap of $7.15 billion, and Sierra Wireless with a market cap of more than $19 billion, among others. The company has endured a troubled 2013, and yet things do not seem as if they are about to get any better. Its shareholders have instituted a class-action lawsuit against BBRY.

Why Are BBRY’s Shareholders Proceeding with the Class-Action Lawsuit?

BBRY’s shareholders have raised a number of pertinent issues that form the basis of their class-action lawsuit against this company. They are concerned that the company has misrepresented or deliberately ignored consumer demands in developing its latest brands of Smartphone devices. They opine that the misrepresentation does not stop with the company’s Smartphone devices. The shareholders say that BBRY misrepresented certain facts when declaring its financial position and that this is not providing them with the chance to get the best deal in its shares.

BBRY is the subject of a bid from its largest shareholder, Fairfax Financial Corp, worth around $4 billion. It has also been linked with a non-disclosure agreement with Lenovo, which will look at BBRY’s books before placing a bid, or not, depending on the company’s financial health. BBRY says that the company is in a healthy state and that it has a long-term future in the industry. It said this through a letter it published in some nine countries across the world, despite the negative reports that continue to come up every day indicating the dire situation facing BBRY.

Now the company’s shareholders, especially those who bought its shares between September 27 2012 and September 20 2013, say the company misled them into thinking that it was in a healthy financial position. They aver that they have lost hundreds of millions of dollars by believing what the company had told them all along regarding its true financial position. BBRY has a lot of work to do in order to prove that this is not what actually transpired. This class-action lawsuit also alleges that BBRY lied that its latest Smartphones were received well across the world.

BBRY Writes a Letter to Reassure Investors Around the Globe

The letter BBRY published across 30 major dailies in nine countries may do very little to convince the public and investors that it is truly in a healthy place financially. If BBRY loses this class-action lawsuit and is guilty, serious ramifications in terms of getting a good bid could be the result. Let us not forget that BBRY recently announced that it expects to cut down its workforce by close to a third between 2013 and 2014. The company is fighting all allegations made regarding its financial status by saying it is debt-free and has substantial cash on hand.

BBRY faces real battle to remain in business. It now has to convince bidders, the Canadian courts, and investors that it is still attractive, and is a stock worth adding to any investor’s portfolio.

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