Investigation Underway for TELUS International Investors Facing Losses as Deadline Looms

TELUS International Under Investigation by Faruqi & Faruqi, LLP

Faruqi & Faruqi, LLP, a prominent national securities law firm, has initiated an investigation into TELUS International (NYSE: TIXT) based on reports of significant losses experienced by its investors. This investigation comes as a reminder for affected parties that the deadline to participate in a federal securities class action is rapidly approaching, specifically by March 31, 2025.

Investors who have incurred losses exceeding $50,000 during the period from February 16, 2023, to August 1, 2024, are encouraged to reach out to James (Josh) Wilson, a partner at Faruqi & Faruqi, to discuss potential legal actions. The firm is known for its dedication, having successfully recovered hundreds of millions of dollars for investors since its establishment in 1995.

The Allegations

The complaint against TELUS International centers around allegations that the company and its executives violated federal securities laws by providing misleading information and failing to disclose crucial details about the company's business operations. The key points include:

1. Product Cannibalization: The investigation argues that TELUS’s AI Data Solutions strategies necessitated the reduction of its higher-margin services, which should have been disclosed to investors.
2. Profitability Concerns: There are also claims that the company’s declining profitability directly linked to its aggressive shift toward developing AI capabilities.
3. Margin Disclosure: Investors were not adequately informed about the pressures on profit margins stemming from this pivot to AI applications, which were revealed to be less profitable than traditional services.
4. Misinformed Positivity: The firm asserts that positive disclosures from TELUS International regarding its prospects and operations lacked a reasonable basis and were materially misleading.

The situation escalated when, on May 9, 2024, TELUS International reported a staggering $29 million year-over-year revenue drop in its first-quarter financial results. During the earnings call, CFO Gopi Chande revealed that the margins from AI offerings could be below average, which led to a sharp decline in the company’s stock price by 18% that day.

Subsequent Financial Performance

Further compounding investor concerns, on August 2, 2024, the company released second-quarter earnings showing a continued trend of declining revenue, with a notable decrease of $5 million quarter-over-quarter. Additionally, adjusted EBITDA metrics fell significantly, prompting the company to lower its full-year fiscal guidance. The announcement of the then-CEO Jeff Puritt’s impending retirement added to the negative sentiment, with the stock price plunging by 36% following the news.

Role of the Lead Plaintiff

In the context of a securities class action, the lead plaintiff is typically the investor who stands to lose the most and is deemed suitable to represent the entire class. Affected investors can either volunteer to take on this role or remain passive class members without penalties on their potential recovery.

Faruqi & Faruqi, LLP is urging any individuals with relevant information about TELUS International’s conduct—such as whistleblowers or former employees—to contact them to support the investigation. Potential participants can find more information by visiting Faruqi Law or contacting Partner Josh Wilson directly at 877-247-4292.

With the looming deadline, investors who believe they have been misled must act swiftly. The successful pursuit of a class action could potentially lead to compensation for losses suffered during this tumultuous period for TELUS International investors.