GTT stocks (NYSE: GTT) soared by 16.04% and the price at the time of writing stands at $2.17. The stock rose by 11.52% in the pre-market on Wednesday.
GTT Communications (GTT) cloud networking service operations
GTT Communications Inc. (GTT) is a multinational IT service management company with headquarters in Virginia, United States and market-capitalization of $127.638 million and revenue of $1.728 billion.
The conglomerate was previously known as Global Telecom and Technology.
The main growth driver for the company is its sales and performance of cloud networking services. It has a global network of clients consisting of international enterprises, governments, and academic institutes. GTT also heavily relies on acquisitions to increase its market and production. Being a global IT management company, the USA accounts for about 40% of the firm’s revenue while the rest of the revenue is majorly centered on European customers. The company has a workforce of 3,100 employees under the current CEO Ernie Ortega.
Streamlining the Company’s portfolio
The company now solely focuses its operational fundamentals on the cloud networking services after it sold its infrastructural division in October 2020, to I Squared Captial. GTT Communcations (NYSE: GTT) needed to sell one of its older division in an effort to pullback and reduce the volatility of the penny stock.
However, the vision to streamline the business to a cloud networking service model could have seen positive play in 2021 as online-platform businesses have seen a high-time demand all over the world. But unfortunately, the current price of GTT Communications Inc. (NYSE: GTT) stock has reduced to 85.57% over the last 12 months. This happened amidst news of class-action lawsuits commenced on 12 January 2021 claiming of misleading reports and records made by GTT Communications about its Cost of Telecommunications Services; throughout the period between November 9, 2020, and May 05, 2016 – referred to as the “Class Period”.
GTT Communications faces serious law-suit
GTT Communications did not submit and file the 10-Q report to the SEC for the quarter ending in June 30th of 2020, stating the reason in NT 10-Q notification that the Company had identified certain issues connecting with previous financial statements; adjustments made without adequate support to Cost of Telecommunications Services and failure to mention expenses in Company’s income statement by recording them under as goodwill.
The class-action lawsuit charges GTT Communications specifically in-accordance with the violation of Securities Exchange Act of 1934 and is representing investors who have made acquisitions of stocks of GTT Communications in the “Class-Period”.
Major repercussions for GTT Companies (NYSE:GTT)
This is a major alleged accounting and reporting fraud which is under review by SEC, this outcome could lead to minor complications with no requirement of significant restatements or a highly-serious issue of adjustments to figures and revaluations of previous major financial reports in the class-period that could lead to severe consequences of SEC registration loss, removal from the stock-exchange and legal repercussions.