It seems International Business Machines Corp. (NYSE:IBM) investors are now losing the patience after the consistent bad quarters. In a recent development, International Business Machines Corp. (NYSE:IBM) has been sued by a shareholder for fraud. The shareholder claims that International Business Machines Corp. (NYSE:IBM) didn’t mention the company Global Foundries, a money-losing semiconductor unit in the contract before selling it off and paying $1.5 billion to another company. International Business Machines Corp. (NYSE:IBM) sold Global Foundries to save taxes because that unit was going through huge losses.
The lawsuit claims that International Business Machines Corp. (NYSE:IBM) did fraud by showing the assets of worthless Global Foundries in its books in order to give hike to the company’s struggling stock. The lawsuit claims that International Business Machines Corp. (NYSE:IBM) must have deleted Global Foundries from its assets books as the company knew that it was worthless and there was no point in writing the equipment, plan and other details on the unprofitable unit under its books to get a temporary high.
International Business Machines Corp. (NYSE:IBM)’s recent quarter results were disappointing. The stock fell by 9% and the overall market value plummeted by $18 billion. This is a major blow for the tech giant.
The lawsuit against International Business Machines Corp. (NYSE:IBM) is done by City of Sterling Heights Police & Fire Retirement System , which claims that the sold unit was worthless and no party was ready to pay even $1 billion for it, including the value of plant, equipment and space. International Business Machines Corp. (NYSE:IBM)’s CEO has also been named as a defendant in the lawsuit. The company didn’t issue any statement regarding this development yet.
Warren Buffett’s Berkshire Hathaway hold around 70 million International Business Machines Corp. (NYSE:IBM) shares.
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