Telephone and Data Systems, Inc. (TDS) Misled Investors Regarding its Subsidiaries’ Ability to Retain Customers
A shareholder filed a class action on behalf of all persons and entities that purchased Telephone and Data Systems, Inc. (NYSE: TDS, TDS-PV, TDS-PU) securities between May 6, 2022 and November 3, 2022. Telephone and Data Systems, Inc. is a diversified telecommunications company.
According to the complaint, United States Cellular (USCellular) operates as a majority-owned subsidiary of TDS. Throughout the class period, USCellular battled a systematic loss of “postpaid” customers. In response, defendants touted USCellular’s purported ability to address postpaid customer “churn” and attrition via tailored promotions and purported expense discipline. Notwithstanding, USCellular’s churn rate continued to worsen and the Company’s promotional activity decimated its profitability.
On November 4, 2022, defendants reported operating results for the third quarter of 2022. Defendants’ corrective disclosures revealed that not only was USCellular’s heavy promotional activity still failing to correct postpaid churn rate, but that the “offer structure” and its lack of “expense discipline” had, in fact, substantially eroded the Company’s profitability. On this news, the price of TDS securities plummeted. TDS’ common stock price declined $4.29 per share (more than 25%), from a closing price of $16.57 per share on November 3, 2022, to a close of $12.28 on November 4, 2022.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Telephone and Data Systems, Inc. Shareholders who want to act as lead plaintiff for the class must file their papers by July 3, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
