I am no finance guru but even I noticed that something fishy was going on when RIM made their “Updated Q1 Guidance” announcement at the end of April. They had just set their guidance at the end of March and all of a sudden in the end of April they had “Updated Guidance.” That would make sense if something unexpected happened but RIM stated the reason was:
This shortfall is primarily due to shipment volumes of BlackBerry smartphones that are now expected to be at the lower end of the range of 13.5-14.5 million forecasted in March and a shift in the expected mix of devices shipped towards handsets with lower average selling prices.
It could be they lost a large order from a customer? The second part of the reason is something RIM knew for months now so its not really something new. Now we learn that Holzer Holzer & Fistel LLC and investigating RIM with a focus “on whether a series of statements made between December 16, 2010 and April 28, 2011, inclusive, regarding RIM’s business, its prospects and its operations were materially false and misleading at the time they were made.”
They even clarify to say:
Specifically, the investigation focuses on, among other things, whether the Company knew but failed to adequately disclose that it was experiencing problems associated with an aging product line which were negatively impacting RIM’s business and margins.
It seems like RIM cannot go a month without getting sued for one reason or another. I asked a few analyst friends of mine why RIM even made that “Updated Q1 Guidance” announcement and I still don’t have a good answer. Anybody have some thoughts?