NEW YORK, Aug. 24, 2019 /CNW/ -- Pomerantz LLP is investigating claims on behalf of investors of GTT Communications, Inc. ("GTT" or the "Company") (NYSE: GTT). Such investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 9980.
The investigation concerns whether GTT and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
In February 2018, GTT announced that it was purchasing Interoute Communications Holdings S.A. ("Interoute") in a transformative acquisition for €1.9 billion ($2.3 billion) in cash.
On May 8, 2019, GTT disclosed a larger-than-expected loss for the first quarter of 2019, including a sequential decline in revenues. GTT blamed its poor performance on a host of issues with the Interoute integration, including migrating legacy systems into GTT's management database, discrepancies with Interoute's billing systems, and a poor salesforce. In addition, GTT disclosed that shortly before the acquisition, Interoute had made a strategic shift to sell cloud services that deviated from GTT's strategy of focusing exclusively on cloud networking. On this news, GTT's stock price fell $7.04 per share, or 17.5%, to close at $33.25 per share on May 8, 2019. GTT's stock price continued to fall the following day, closing at $29.91 per share, for a two-day decline of over 25%.
On May 30, 2019, GTT made a presentation at the Cowen TMT Conference 2019, in which the Company disclosed that the Interoute integration was "challenging … as we moved thousands of Interoute employees off of the Interoute systems and off of how they sold, installed, billed and moved everything into GTT systems there [were] some delays as we both went to render a new bill to the customers who are going to be getting a GTT bill instead of an Interoute bill." On this news, GTT's stock price fell $1.22 per share, or 4.9%, to close at $23.78 per share on May 31, 2019.
On June 24, 2019, analysts at Craig-Hallum reduced their price target on GTT because "the company is in the midst of altering its DNA, which had been largely built of growth via acquisitions, a process that has been challenged by debt levels and recent integration issues." Craig-Hallum noted that instead of continuing its roll-up strategy, GTT is now trying to "rebuild its organic growth platform" by hiring a new salesforce. On this news, GTT's stock price fell $2.87 per share, or 12.6%, to close at $19.97 per share on June 24, 2019.
Finally, on July 2, 2019, KeyBanc downgraded GTT and highlighted how internal data on GTT suggested hiring activity remained slow, indicating the increase in employee representatives necessary to achieve revenue targets might be lower than expected. KeyBanc also reported on recent leadership changes in the Americas division, noting that they were "an indication that organizational health is not great." On this news, GTT's stock price fell $0.50 per share, or 2.7%, to close at $18.30 per share on July 2, 2019.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
888-476-6529 ext. 9980
SOURCE Pomerantz LLP