Stride, Inc.

On September 14, 2025, Simply Wall St. published a report stating that the Gallup-McKinley County Schools Board of Education had filed a complaint against Stride, alleging fraud, deceptive trade practices, systemic violations of law, and intentional and tortious misconduct, including inflating enrollment numbers by retaining “ghost students” on rolls to secure state funding per student and ignoring compliance requirements, including background checks and licensure laws for its employees.

On this news, Stride’s stock price fell $18.60, or 11.7%, to close at $139.76 per share on September 15, 2025, thereby injuring investors.

Then, on October 28, 2025, Stride released its first quarter fiscal 2026 financial results, revealing the Company had purposely “limit[ed] enrollment growth while we improve our execution.” The Company also revealed it had experienced “system implantation issues” resulting in “higher withdrawal rates and lower conversion rate.” The Company stated that “these factors resulted in approximately 10,000 to 15,000 fewer enrollments” and “these challenges will likely restrict [its] in-year enrollment growth.”

On this news, Stride’s stock price fell $83.48., or 54.4%, to close at $70.05 per share on October 29, 2025, thereby injuring investors further.

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 that: (1) Stride was inflating enrollment numbers by retaining “ghost students”; (2) Stride was cutting staffing costs by assigning teachers’ caseloads far beyond the required statutory limits; (3) Stride was ignoring compliance requirements, including background checks and licensure laws for its employees, and ignoring federally mandated special education services to students; (4) Stride was suppressing whistleblowers who documented financial directives from Stride’s leadership to delay hiring and deny services to preserve profit margins; (5) Stride was losing existing and potential student enrollments; and (6) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.