A securities class action has been filed in the USDC – S.D.N.Y. against TELUS International (Cda) Inc. (TIXT) (“Telus International” or the “Company”) on behalf of all persons or entities who purchased or otherwise acquired Telus International securities between February 16, 2023, and August 1, 2024, both dates inclusive (the “Class Period”).
Telus International purports to design, build, and deliver digital solutions for customer experience, including artificial intelligence (“AI”) services, cloud solutions, and user experience/user interface design. Historically, Telus International’s primary business was customer experience management (“CXM”) for business call centers.
Starting with its acquisition of Lionbridge AI in December 2020, the Company expanded its digital customer experience footprint and introduced “AI Data Solutions” to its services. Since being introduced, the Company has completed additional acquisitions to bolster its AI-related capabilities. As the Company pivoted, the Company’s customer experience management services went from accounting for 75% of the Company’s revenues in 2019 to only 48% in 2022. Over the same period, revenue from Al Data Solutions increased from 0% to 13%. The Company’s digital focus has grown such that, starting in September 2024, Telus International rebranded itself as Telus Digital.
The Complaint alleges that, throughout the Class Period, the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors:
(1) the Company’s AI Data Solutions offerings required the cannibalization of its higher-margin offerings;
(2) that Telus International’s declining profitability was tied to the Company’s drive to develop AI capabilities;
(3) that Telus International’s shift toward AI put greater pressure on the Company’s margins than previously disclosed; and
(4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis, thereby harming investors.
As a result of the second quarter 2024 financial results, the Company’s share price fell $2.33 or 35.96%, to close at $4.15 on August 2, 2024, on unusually heavy trading volume.
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