Did you lose money on investments in Telephone and Data Systems? If so, please visit Telephone and Data Systems, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or firstname.lastname@example.org to discuss your rights.
NEW YORK, June 13, 2023 (GLOBE NEWSWIRE) -- Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the securities of Telephone and Data Systems, Inc. (“TDS” or the “Company”) (NYSE: TDS; TDSPrV; TDSPrU) between May 6, 2022 and November 3, 2022, inclusive (the “Class Period”). The lawsuit was filed in the United States District Court for the Northern District of Illinois and alleges violations of the Securities Exchange Act of 1934.
If you wish to serve as lead plaintiff, you must move the Court no later than July 3, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
United States Cellular Corporation (“UScellular”) operates as a majority-owned subsidiary of TDS. TDS and UScellular are referred to as the “Companies”. As of December 31, 2022, TDS owned 84% of UScellular’s common shares, had the voting power to elect all of the directors of UScellular, and controlled 96% of the voting power in matters other than the election of directors of UScellular. In 2022, UScellular accounted for 77% of TDS’ total operating revenues.
Throughout fiscal 2021 and into fiscal 2022, UScellular was battling a systemic loss of “postpaid” customers. Postpaid customers are those who have a line of service with the Company that is billed in monthly installments, generally one month in advance of service. Throughout the Class Period, approximately 90% of the Company’s individual lines of service associated with devices activated by UScellular customers were postpaid. UScellular’s net postpaid customers declined every quarter throughout 2021, resulting in the loss of 26,000 customers over the year. Likewise, UScellular’s churn rate of postpaid customers increased over the same period.
At the start of the Class Period on May 6, 2022, the Companies announced UScellular’s financial and operating results for the first fiscal quarter of 2022, reporting that UScellular was losing more “postpaid” customers than it was able to add, resulting in a net loss of postpaid customers. Throughout the Class Period, the Companies would continue to see UScellular’s postpaid customer business deteriorate.
Defendants routinely touted UScellular’s purported ability to address postpaid customer “churn” and attrition via tailored promotions, including a “free upgrade” promotion beginning in the second quarter of 2022. The “free upgrade” promotion applied to new and existing customers and was designed to encourage customers to upgrade their phones, keeping them “in contract” and reducing the postpaid customer churn. This promotion was reportedly based on the results of a series of regional tests and trials conducted during the second quarter of 2022. Defendants also touted their ability to balance UScellular’s promotional activity with UScellular’s profitability.
However, contrary to Defendants’ statements assuring investors that tailored promotions and purported expense discipline would address UScellular’s churn rate while balancing its profitability, UScellular’s churn rate continued to worsen and the Company’s promotional activity decimated its profitability.
On November 4, 2022, Defendants disclosed the truth. When the Company reported operating results for the third fiscal quarter of 2022, Defendants revealed that not only was UScellular’s heavy promotional activity, including its “free upgrade” promotion, still failing to correct postpaid churn rate, but 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 common stock declined $4.29 per share, more than 25%, to close at $12.28 on November 4, 2022. TDS’ preferred shares trading under the symbol TDSPrV declined $0.96 per preferred share, more than 5%, to a close of $16.24 on November 4, 2022. And TDS’ preferred shares trading under the symbol TDSPrU declined $1.01 per preferred share, more than 5%, on November 4, 2022.
If you purchased or acquired TDS securities, and/or would like to discuss your legal rights and options please visit Telephone and Data Systems, Inc. Shareholder Class Action Lawsuit or contact Peter Allocco at (212) 951-2030 or email@example.com.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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