Gogo Inc. (GOGO) Accused of Downplaying Problems with Its Antennas

According to the complaint against the company's officers and directors for alleged violations of the Securities Exchange Act of 1934 between February 27, 2017 and May 7, 2018, Gogo Inc. (GOGO)'s 2Ku antenna suffered from manufacturing, software, and reliability issues due to de-icing fluids from planes infiltrating the 2Ku system. As a result of the many problems with the 2Ku antenna, Gogo was unable to meet its previously issued 2018 guidance. On May 4, 2018, Gogo discussed the financial impact of the de-icing issues, revealing that it anticipated adjusted EBITDA to be lower than expected due to increased costs and lost revenue related to the 2Ku implementation challenges. Then, on May 7, 2018, Moody's downgraded Gogo's credit rating, citing Gogo's weak operating performance. Since Gogo's troubles were made public, Gogo's stock fell 41% to close at $4.86 per share on June 29, 2018, and has yet to recover its value.

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