Pareteum, formerly known as Elephant Talk Communications Corp., operates a communications cloud services platform in Europe and internationally.
On December 14, 2017, the Company provided an update to shareholders, highlighting that its “restructuring and repositioning in 2016 has led to solid growth in 2017, and has defined our innovation in both services and market positioning, establishing a strong outlook for our success in 2018 and beyond.”
Following a series of positive statements by the Company throughout the class period touting its financial performance and outlook, on March 18, 2019, Pareteum disclosed a material weakness in its internal control over financial reporting and that disclosure controls and procedures were not effective as of December 31, 2018; however, it assured investors that measures had been implemented to remediate the material weakness.
Then, on October 21, 2019, the Company revealed that it would “restate its previously issued consolidated financial statements as of and for the full year ended December 31, 2018, and interim periods ended March 31, 2019 and June 30, 2019” which decision was “based on the Company’s conclusion that certain revenues recognized during 2018 and 2019 should not have been recorded during that period…[because] the Company may have prematurely or inaccurately recognized revenue.”
Following this news, the price of Pareteum tumbled in after-market trading, closing at $0.73/share on October 21, 2019 and opening at $0.37/share on October 22, 2019.