According to the law firm press release, CenturyLink, a Louisiana corporation, is the third-largest telecommunications company in the United States. CenturyLink provides communications and data services to residential, business, governmental, and wholesale customers.
The securities class action charges that, throughout the Class Period, CenturyLink made false and/or misleading statements to investors and failed to disclose material adverse facts concerning CenturyLink's dividend cut.
Specifically, the complaint alleges that CenturyLink misled investors concerning the strength of its free cash flow, which was an important factor in the Company's ability to maintain its dividend levels. These false and misleading statements artificially inflated, maintained, and increased the price of CenturyLink's common stock, which traded as high as $42.99 during the Class Period.
On February 13, 2013, CenturyLink shocked investors when it issued a press release announcing that that it was immediately slashing its dividend by over 25%, from 72.5¢ to 54¢ per share. At the same time, CenturyLink announced authorization to repurchase up to $2.0 billion of the Company's outstanding common stock. In response to this news, the price of CenturyLink common stock plummeted over 22% – to $32.27 per share on February 14, 2013, resulting in millions of dollars in damages to CenturyLink shareholders.