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Friday, June 21, 2024 | Back issues
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Multinational Telecom Firm Altice Touted Pre-IPO ‘Strength’ While Tanking in Biggest Markets, Class Claims

Shareholders are suing communications company Altice USA after the company’s June 2017 initial public offering documents touted the company's "competitive advantage" while it was facing growing customer attrition in its "most important" European markets.

Lead plaintiff Ryan Newman filed the complaint in New York Supreme Court.  Altice USA is a subsidiary of Altice N.V., a multinational telecommunications company based in the Netherlands, and "interdependent" with its U.S. affiliate, sharing officers and directors, reporting financial results and conducting joint earnings calls.

The June 2017 IPO, with over 171 million shares issued at $30 each, heavily referenced Altice USA’s relationship to Altice N.V. being its “competitive strength,” the lawsuit says, strongly touting the synergy between the two companies and affirming the dependence of Altice USA on Altice N.V.

At the time, shareholders claim Altice N.V. was actually “suffering severe customer attrition in its most important markets, France and Portugal, as a direct result of mismanaged price increases and shoddy network and customer support.”

The class claims the company knew of the issues, but allegedly omitted the damning information from offering materials.

The IPO raised more than $2.1 billion in proceeds. But in November 2017 third quarter results for both companies were “severely disappointing," and Altice USA shares took a dive down to $18 per share from the $30 IPO price.

The lawsuit says the defendants from both companies knew the financial state of Altice N.V. before the IPO but withheld the risk factors from the investing public to forge ahead with an “extremely lucrative” IPO.

The class is represented by Thomas L. Laughlin and Rhiana L. Schwartz of Scott + Scott in New York.

Categories / Business, Consumers, Financial, Government, International, Securities, Technology

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