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2U, Inc.

Company Name2U, Inc.
Stock SymbolTWOU
Class PeriodFebruary 25, 2019 to July 30, 2019
Lead Plaintiff Motion DeadlineOctober 07, 2019

On May 7, 2019, the Company lowered its revenue guidance for fiscal 2019 to a range of $534 to $537 million, from prior guidance range of $546.6 to $550.8 million, due to declining average enrollments in some of its largest graduate programs.

On this news, the Company’s share price fell $15.16, or nearly 26%, to close at $44.77 per share on May 8, 2019, on unusually heavy trading volume. 

Then on July 30, 2019, after the market closed, the Company reported a larger-than-expected loss for second quarter 2019. The Company also revised its guidance for fiscal 2019, expecting a net loss between $157.5 and $151.5 million, compared to prior net loss guidance between $79.0 and $77.2 million, because it would “moderate [its] grad program launch cadence.”

On this news, the Company’s share price fell $23.70, or nearly 65%, to close at $12.80 per share on July 31, 2019, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, 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) that the Company faced increasing competition in online education and particularly regarding graduate programs; (2) that the Company faced certain program-specific issues that negatively impacted its performance; (3) that, as a result, the Company’s business model was not sustainable; (4) that the Company would slow its program launches; and (5) 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.

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