The shares of Synchronoss Technologies (SNCR) are falling after Credit Suisse downgraded the shares to Underperform, the firm's equivalent of a sell rating, citing the upcoming closure of AT&T's (T) "Locker" offering. The personal cloud service was powered by Synchronoss, the firm noted. In separate news that came after Credit Suisse's downgrade, Siris Capital announced that it had entered into a non-disclosure agreement with the company on May 19 as it "continues the exploration of a potential transaction" involving Synchronoss. Siris, which holds a stake of about 13% in Synchronoss, had previously said that it was considering taking the company private or making a significant minority investment in it. Synchronoss provides software and services for communications companies.

DOWNGRADE Credit Suisse analyst Michael Nemeroff today downgraded Synchronoss to Underperform from Neutral. Although the company was not receiving a great deal of revenue from its "Locker" deal with AT&T, that revenue was expected to ramp and become "more meaningful over time," the analyst stated. No reason was given for the discontinuation of the deal, but Nemeroff believes that AT&T felt that the service did not provide sufficient value to justify the marketing initiatives required to support its expansion. More importantly, AT&T's decision increases the risk that Verizon (VZ) could alter its cloud deal with Synchronoss, the analyst warned. He kept a $13 price target on Synchronoss shares.

WHAT'S NOTABLE: AT&T announced on May 8 that it was discontinuing its Locker service as of August 3. Users will not be able to upload anything to the service after June 4, the company noted. On April 27, Synchronoss announced that its results for this quarter would miss expectations and said that its CEO and CFO would leave the company. At that time, JPMorgan analyst Sterling Auty downgraded Synchronoss to Neutral and cut his price target for the shares to $27 from $65. The analyst made "significant cuts" to his 2017 and 2018 revenue and profitability estimates and noted that the company's press release about its management changes and guidance reduction had "very limited information."

PRICE ACTION: In late morning trading, Synchronoss fell 8% to $12.45.