One of HP’s shareholders, Richard Gammell, has filed a lawsuit against HP for giving the TouchPad and the webOS the boot. Gammell is demanding an undisclosed amount for the damages caused by the pull-out. This applies to all individuals who have invested in Hewlett Packard from the 22nd of November, 2010 to the 18th of August, 2011.
The class action lawsuit implicates a number of HP executives, which include Leo Apotheker (CEO) and Cathie Lesjak (CFO). Gammell claims that these executives deceived investors, saying that they led them to believe that the tablet and operating system would perform better in the market.
When HP announced on the 18th of August that they would discontinue the tablet and platform, the company’s share value immediately dropped by 20%. This is the biggest drop in value for HP in a single day in more than 20 years. With this drop, you can now understand why the company’s investors took legal action.
If you think about it, HP discontinuing the webOS and TouchPad was a wise move. This division of the company wasn’t generating as much revenue compared to its other sectors. Regardless, HP should have been straightforward with its investors. If they did, then maybe none of this would have happened.