NEW YORK, May 14, 2019 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against AT&T, Inc. ("AT&T" or the "Company") (NYSE: T) and certain of its officers. The class action, filed in United States District Court, for the Southern District of New York, and indexed under 19-cv-02892, is on behalf of a class consisting of all persons other than Defendants (a) acquired AT&T common stock pursuant or traceable to the SEC Form S-4 registration statement and prospectus (collectively, the "Registration Statement") issued in connection with AT&T's June 2018 acquisition of and merger with Time Warner (the "Acquisition"); and/or (b) purchased or otherwise acquired AT&T securities between October 22, 2016 and October 24, 2018, both dates inclusive (the "Class Period"). Plaintiff asserts claims against AT&T and certain of AT&T's officers and directors (collectively, "Defendants") under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased AT&T securities during the class period, you have until May 31, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
AT&T is a telecommunications and media company, incorporated under the laws of Delaware, with principal executive offices located at 208 S. Akard St., Dallas, Texas, 75202.
In June 2018, in connection with the Acquisition, AT&T issued approximately 1.185 billion new shares of AT&T common stock directly to former shareholders of Time Warner common stock as follows: each former share of Time Warner common stock issued and outstanding immediately before the Acquisition was converted into the right to receive 1.437 shares of newly issued AT&T common stock. In addition to newly issued AT&T common stock, former shareholders of Time Warner common stock also received $53.75 per share in cash. Each of these new shares of AT&T common stock was issued pursuant to the Registration Statement.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) AT&T's Registration Statement touted false and misleading financial results, trends, and metrics and omitted material facts rendering those financial results, trends, and metrics materially misleading. Principally, the Registration Statement touted yearly and quarterly growth trends in AT&T's Entertainment Group segment, particularly Video Entertainment, including quarterly subscriber gains in its DirecTV Now service sufficient to offset any decrease in traditional satellite DirecTV subscribers, such that AT&T was experiencing an ongoing trend of total video subscriber "Net Additions."; (ii) The Registration Statement also purported to warn of numerous risks that "if" occurring "may" or "could" adversely affect the Company while failing to disclose that these "risks" had already materialized at the time of the Acquisition; (III) AT&T had substantially increased prices, while at the same time discontinuing promotional discounts for its DirecTV Now service. As a result, DirecTV Now subscribers were leaving (i.e., not renewing) as soon as their promotional discount periods expired, while at the same time new potential DirecTV Now customers were unwilling to pay the higher prices and therefore not subscribing at all. Thus, by the time of the Acquisition, AT&T's reported "Net Additions" growth trend was already reversing into a severe "Net Loss"; and (iv) as a result of the foregoing, Defendants' positive statements about AT&T's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On October 24, 2018, Defendants announced AT&T's 3Q2018 results (the first full quarter post-Acquisition) and revealed, inter alia, a dramatic reversal of its reported total subscriber "Net Additions" trends. Traditional DirecTV satellite subscriber losses jumped over 25% from 286,000 to 359,000 quarterly. Meanwhile, DirecTV Now subscribers plummeted over 85% from 342,000 down to 49,000 quarterly. These dramatically diminished DirecTV Now subscriber gains were nowhere close to offsetting the dramatically increased traditional satellite subscriber losses. As a result, Defendant AT&T's 80,000 total video subscriber "Net Video Additions" had reversed into a 297,000 total subscriber "Net Loss."
On these revelations, AT&T's stock price fell $3.93 per share, or nearly 12%, from a close of $33.02 per share on October 23, 2018, to a close of $29.09 per share on October 26, 2018, on unusually high trading volume.
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
SOURCE Pomerantz LLP