Why Pareteum Stock Jumped Thursday

The cloud-communications platform specialist "categorically" denied all claims from recent short-seller reports.

Daniel Sparks
Daniel Sparks
Jun 27, 2019 at 11:45AM
Technology and Telecom

What happened

Shares of Pareteum (NASDAQ:TEUM) popped on Thursday, rising as much as 12.5%. At 11:17 a.m. EDT, the stock was up 9.5%.

The stock's gain comes as Pareteum responded to short-seller Viceroy Research's scathing criticisms of the cloud-communications platform company earlier this week. 

A chart showing a stock price moving higher

Image source: Getty Images.

So what

The report by Viceroy followed another short-seller attack by Aurelius Value earlier this month. But Pareteum says claims in both reports are false.

"Pareteum Corporation categorically denies all allegations put forth in the short seller reports," it said on its investor relations website on Thursday. "Without giving credence to the reports in detail, we do state the allegations that Pareteum has breached U.S. sanctions against Iran are false."

Now what

Management remains confident in its business tactics and its underlying momentum.

"Despite coordinated attacks designed only for the financial gain of these short sellers," it said, "we remain a dynamic and growing company that stands by the quality of the information reported in our most recent earnings announcements, including the guidance provided for 2019."

In the company's first quarter of 2019, it delivered 460% year-over-year revenue growth and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $5.2 million. For the full year of 2019, management expects revenue to rise in a range of 255% to 285% year over year.