IBM Hit With Shareholder Suit Over Legacy Revenue Claims (1)

IBM is facing a proposed securities class action alleging it deceived investors into believing that its transition from legacy mainframe revenues was successful.

Although IBM’s mainframe business generates billions in annual revenue, the market for mainframes “has been waning” since the advent of powerful PCs, mainframe offerings from the company’s competitors, and cloud computing, according to the complaint filed Jan. 13 in the US District Court for the Southern District of New York.

In response, IBM began reinventing itself as a “cognitive solutions” and cloud computing platform company, lead plaintiff June E. Adams Irrevocable Trust alleges.

To demonstrate its transition ...