NEW YORK, Aug. 6, 2019 /PRNewswire/ -- Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of GTT Communications, Inc. ("GTT or the "Company") (NYSE: GTT). A complaint has been filed against the Company and certain executives. Investors who purchased GTT common stock between February 26, 2018 and July 1, 2019, inclusive (the "Class Period"), may be affected.
According to the complaint, 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, according to the complaint, 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. Following 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 on May 9, 2019, for a two-day decline of over 25%.
On May 30, 2019, GTT made a presentation at the Cowen TMT Conference 2019 during 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 for the first time." Following 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." According to the complaint, 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. Following 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.
According to the complaint, 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, allegedly noting that there was "an indication that organizational health is not great." Following 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.
If you are a member of the proposed Class, you may move the court no later than September 30, 2019 to serve as a lead plaintiff for the purported class. You need not seek to become a lead plaintiff in order to share in any possible recovery. If you would like to discuss the complaint or our investigation, please contact us by emailing pmayer@kaplanfox.com or by calling 800-290-1952.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Kaplan Fox & Kilsheimer LLP, with offices in New York, San Francisco, Los Angeles, Chicago and New Jersey, has many years of experience in prosecuting investor class actions. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com. If you have any questions about this Notice, your rights, or your interests, please contact:
Donald R. Hall
KAPLAN FOX & KILSHEIMER LLP
850 Third Avenue, 14th Floor
New York, New York 10022
(800) 290-1952
(212) 687-1980
Fax: (212) 687-7714
E-mail: dhall@kaplanfox.com
Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
350 Sansome Street, Suite 400
San Francisco, California 94104
(415) 772-4700
Fax: (415) 772-4707
E-mail: lking@kaplanfox.com
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SOURCE Kaplan Fox & Kilsheimer LLP