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HP must face shareholder lawsuit over $16.2 billion market value loss

Suit accuses HP of misleading investors about its commitment to WebOS and other products

A judge has ordered Hewlett-Packard Co. to face a shareholder lawsuit accusing the computer maker’s former management of fraudulently misleading investors about its commitment to certain products.

The lawsuit accuses executives including former CEO Leo Apotheker of misleading shareholders about HP’s commitment to WebOS, the operating system it acquired when it purchased Palm Inc. in 2010, and other products including its TouchPad tablet.

On Aug. 18, 2011, Apotheker announced that HP planned to abandon WebOS, stop selling TouchPads and refocus itself on business products and services. In the two days after this announcement, HP’s stock dropped by 24.8 percent, and the company lost $16.2 billion in market value.

"It is far from implausible that a corporate executive who had spent months building excitement and momentum around important, new technology products might recklessly misrepresent the inability to deliver on those promises," U.S. District Judge Andrew Guilford wrote in his decision.

Read more at Thomson Reuters.

 

For more InsideCounsel coverage of HP, see below:

U.K. regulators probe Autonomy’s finances

HP sued over Autonomy-deal accounting fiasco

WSJ Law Blog: Are the lawyers to blame for the HP-Autonomy mess?

Judge dismisses shareholder suit against Mark Hurd, HP directors

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