Nokia sued over 2008 production delays

Nokia sued over 2008 production delays

Nokia is being sued by investors who claim the company hid production delays in 2008.

The investors claim the cover up, combined with a price-cutting strategy, caused a fall in mobile phone prices and operating margins.

The case - City of Roseville Employees’ Retirement System v. Nokia Corp – has been brought on behalf of buyers of Nokia’s American Depository Receipts (ADRs). It was filed last week in New York’s federal court. The investors claim Nokia became aware of production delays with its mid priced phones in early 2008.

The investors claim Nokia ‘hid this fact from investors and instead highlighted the company’s expected launch of several new phones.’

Around the same time, as competition intensified, Nokia began slashing prices, which, combined with the production delays, cut operating margins to 18.6 percent in the third quarter of 2008 from 21.2% in the first quarter, the claimants state.

Nokia’s ADRs fell to $20.62 from $38.25, according to the claimants. ADRs are issued by U.S. banks to allow investment in non-U.S. companies. Nokia’s ADRs, each representing one ordinary share, fell by around 35 cents to $13.39 in New York Stock Exchange composite trading last week.

Nokia said it was looking into the claim.


Written by Mobile Today
Mobile Today


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