Altice USA, Inc.
- Company Name
- Altice USA, Inc.
- Stock Symbol
- Class Period
- Purchasers of Altice publicly traded securities pursuant to the Company’s initial public offering on or about June 22, 2017.
- Motion Deadline
- January 18, 2019
- Eastern District of New York
The complaint charges Altice, certain of its officers and/or directors and the underwriters of its June 2017 initial public offering (“IPO”) with violations of the Securities Act of 1933. Altice is a broadband communications and video services provider in the United States. The Company delivers broadband, pay television, telephony services, Wi-Fi hotspot access, proprietary content and advertising services to millions of residential and business customers.
On April 11, 2017, in connection with the IPO, Altice filed a draft registration statement on Form S-1 with the SEC, which was subsequently amended and declared effective on June 21, 2017, and on June 23, 2017, Altice filed its final prospectus on Form 424B4 (together the “Offering Documents”).
The complaint alleges that the Offering Documents issued in connection with the IPO were negligently prepared and, as a result, contained untrue statements of material fact and/or omitted to state material facts required to be stated therein. Specifically, the Offering Documents misrepresented and/or failed to disclose material adverse information, including that the Company’s proprietary growth model (known as the “Altice Way”), which was previously developed in Europe and described in the Offering Documents as a means to achieve superior margin performance, falsely touted Altice’s capacity to face already existing highly competitive environments and ever-changing consumer behaviors; that Altice was suffering from aggressively growing competition both in Europe and the United States, which was directly causing negative and decelerating revenue and EBITDA growth and impacting Altice’s market share; that Altice was suffering from mismanaged rate events and poorly managed network and customer care both in its France and Portugal segments, which was impacting its customer base and churn rate; and that Altice could not simply replicate its proprietary growth model in the United States. As a result of these false statements and/or omissions in the Offering Documents, Altice was able to sell more than 71.7 million shares of common stock in the IPO at a price of $30 per share for proceeds of approximately $362 million.
Then, during November 2017, the price of Altice common stock started to decline when the Company began to disclose adverse information regarding its business and prospects. On November 3, 2017, in a conference call to discuss the Company’s third quarter 2017 results, Altice disclosed “a year-over-year deterioration in both France and Portugal . . . as a result of mismanaged rate events in both countries” and that “not everything is going right here at the moment.” Later that month, on November 15, 2017, the Company’s CEO admitted that they had not been able to “appl[y] the Altice Way from A to Z.” As of the filing of the complaint, Altice stock was trading at approximately $17 per share, a decline of more than 43% from the price the stock was sold at in the IPO.