Shares of Nokia Corp. (NYSE: NOK) touched a new 52-week low today at $3.12. The struggling handset maker has been hit with a class-action lawsuit charging that the company misled investors regarding the impact of Nokia’s partnership with Microsoft Corp. (NASDAQ: MSFT) on new smartphones. Here’s a bit from the law firm’s press release announcing the suit:
[Nokia] told investors that Nokia’s conversion to a Windows platform would halt its deteriorating position in the smartphone market. It did not. This became apparent on April 11, 2012, when Nokia disclosed that its first quarter performance would be worse than expected.
Now it’s true that Nokia has lost its once-mighty position in handsets as smartphones from Apple Inc. (NASDAQ: AAPL) and those using the Android operating system from Google Inc. (NASDAQ: GOOG) have come to dominate the market. But how quickly did the company’s shareholders think it would take to turn things around?
The lawsuit also refers to the bungled launch of the Lumia 900, which led Nokia essentially to offer the new phone for free until the software bug was fixed. Yup, that happened too.
And when you’re down there are always those willing to give you a little extra kick, and Nokia’s shareholders are fleeing the stock again today in the wake of the lawsuit. From a non-legal point of view, the lawsuit doesn’t appear to have a chance. But it will distract Nokia and that’s the last thing the company needs right now.
The Lumia 900 combined with Microsoft’s Windows Phone 7 operating system has gotten good reviews and stands a reasonable chance of recovering some lost ground when Windows Phone 8 launches later this year. The Nokia-Microsoft combination might not ever cause any sleepless nights at Apple or Samsung, but that’s no reason to call the Lumia 900 a flop and to sue the company for not turning around in a couple of quarters a problem that took years to get to this point.
Nokia’s shares are down about -3.6% at $3.16, below the prior 52-week range of $3.54-$8.80.