Gerdau SA (ADR) (NYSE:GGB) has been facing a number of class action lawsuits, from a number of law firms, on charges of issuing false and misleading statements to the investors. However, investors have until July 25, for the appointment of a lead plaintiff for the lawsuit. Investors who had purchased the shares of GGB, during the period of June 2, 2011 and May 15, 2016, can be appointed as a lead plaintiff. It should be noted here that a class certification has not yet been issued and hence no attorney has been appointed.
As per detailed reports, the company is under fire for being engaged in bribery schemes, with the Board of Tax Appeals, in Brazil. It is claimed that GGB defrauded a total of $429 million, from the Brazilian tax authorities. As such, the law firms claim that the company’s statements had been materially false and misleading, during the class period. Fortunately, for the company, with the deadline fast approaching and no class certification, the stock seems to be once again on the rise.
The stock had suffered a decline, earlier on July 13, when Brazil’s Tax Auditing Court, passed a ruling against the company, on all four cases, concerning bribery and influence peddling. However, Gerdau had stated that it would appeal against the decision. Analysts are, however, divided on the stock, as 1 rated the stock a buy and another sell, from a total of 2 analysts which cover the stock.
Analysts at Zacks Research believe that stock to be a buy, but also state that a better option would be to bet on ArcelorMittal MT, in the steel industry. Another report from Zacks, has however, indicated that GGB’s diversified portfolio is still attractive. Furthermore, the company’s widespread scale of operations also ensures that a loss in one region, is offset by improvement in another.
Gerdau SA (ADR) (NYSE:GGB) was trading at a share price of $2.18, at the closing bell, during the July 22 trading session, after having gained 5.83%.