Piper entered into a partnership with Hooli and its CEO Gavin Belson to test the app. A thousand Hooli employees participated using Hooli phones. There were three reports of problems during the testing all related to downloading 3D videos. Users attempted to download 3D videos the phones overhead and caught in all three incidents. Hendricks and Belson disagreed about the cause of the problem. Hendricks believed the phone batteries were at fault, while Belson believed the app caused the fires. Worrying that the problem could make Piper the next Samsung which lost 25% of its value after having to conduct a recall Hendricks and Belson agreed to further …show more content…
Six phones from the former group and four phones from the latter group caught fire. An analyst firm crunched the numbers and created a report. The most important point from the report was, “[t]he number of phones catching fire while the Pied Piper app is downloading 3D videos is not statistically significant.” Neither Belson nor Hendricks knew what to do with the information. Hendricks wanted to delay the release of the app, but Belson wanted to press forward. Hendricks sent the report to outside counsel who after reviewing the materials for only a few hours stated that in his opinion there was no duty to disclose, because “a study showing statically insignificant results is not material to