Frontier Communications Corporation (NYSE: FTR)
A class action has been commenced on behalf of purchasers of Frontier Communications Corporation (NYSE: FTR) common stock during the period between February 6, 2015 and May 2, 2017 (the “Class Period”).
The complaint alleges violations of the Securities Exchange Act of 1934. Frontier provides communications services in the United States, including broadband, video and voice services. In April 2016, Frontier completed the acquisition of the wireline operations of Verizon Communications, Inc. in California, Texas and Florida (the “Verizon Acquisition”), for a purchase price of $10.5 billion in cash and assumed debt.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Verizon Acquisition, including that the Company had acquired a substantial number of non-paying accounts as part of the Verizon Acquisition, which would require the Company to increase its reserves and write off amounts from accounts receivable associated with the non-paying accounts. As a result of defendants’ false statements and/or omissions, Frontier securities traded at artificially inflated prices during the Class Period, with its stock reaching high prices of more than $85 per share. 
On February 27, 2017, Frontier reported its fourth quarter 2016 financial results, disclosing an $80 million net loss and stating that its results were impacted by its “‘intensified efforts to resolve acquired accounts in California, Texas and Florida that [it] ha[d] determined to be non-paying.’” On this news, the Company’s stock price fell $5.40 per share, or nearly 11%, to close at $43.95 per share on February 28, 2017.
Then on May 2, 2017, Frontier reported its first quarter 2017 financial results, including a net loss of $75 million and a first quarter revenue decline of $53 million year-over-year. On a conference call the same day, defendants stated that approximately $16 million of the revenue decline was a result of the clean-up of non-paying accounts and the automation of legacy non-paying disconnects. On this news, the price of the Company’s stock fell $4.80 per share, or more than 16%, to close at $24.15 per share on May 3, 2017.
If you are a current shareholder and purchased stock between February 6, 2015 and May 2, 2017, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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