Several law firms are contacting investors in Comtech Telecommunications (NASDAQ: CMTL) to see if there is an interest in filing a class action lawsuit against the firm. One law firm, Hagens Berman, claimed that Comtech faces “heightened financial uncertainty” after it delayed the filing of its quarterly financial statements.
“This latest development [the financial reporting delay] adds to a string of negative events that have cast a shadow over the company’s future,” wrote Hagens Berman shareholders advocates.
The Schall Law Firm urged shareholders that have lost more than $100,000 to join a possible lawsuit against Comtech. The investigation focuses on whether the company issued “false and/or misleading statements and/or failed to disclose information pertinent” to investors, in regard to events that led to losses in share value.
In July, Simply Wall Street reported that Comtech added $8.8 million to market capitalization, though investors from five years ago still have losses of 87 percent.
“While the broader market gained around 19 percent in the last year, Comtech shareholders lost 67 percent,” Simply Wall Street wrote in an investor note. “Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 13 percent per year over five years.”
In March 2024, CEO Ken Peterman was fired by Comtech, financial performance suffered, and the filing of quarterly financial statements was delayed, all of which culminated in a legal investigation by Hagens Berman into potential securities violations, according to the law firm.
“The repeated delays in filing financial statements and the ongoing financial struggles at Comtech are deeply concerning,” said Reed Kathrein, a partner at Hagens Berman. “Our investigation into potential securities violations is ongoing, and we are committed to protecting the rights of investors who may have been harmed by misleading information.”
In January, Comtech’s biggest current shareholders, White Hat Capital and Magnetar, agreed to make an additional $45 million strategic investment in Comtech. But the company attributed the filing delay to its ongoing efforts to refinance its credit facility.
“We’ve been engaging with potential lenders to refinance our existing credit facility, and have advanced into what we believe are productive negotiations,” said Comtech’s new CEO John Ratigan, during the firm’s second quarter earnings call in March. “We expect to replace our existing credit facility and look forward to sharing more details once we have finalized our important work here.”
By J. Sharpe Smith, Inside Towers Technology Editor
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