NEW YORK, Aug. 8, 2019 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in 2U, Inc. ("2U" or the "Company") (NASDAQ:TWOU) of the October 7, 2019 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in 2U stock or options between February 25, 2019 and July 30, 2019 and would like to discuss your legal rights, click here: www.faruqilaw.com/TWOU. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased 2U securities between February 25, 2019 and July 30, 2019 (the "Class Period"). The case, Harper v. 2U, Inc., No. 1:19-cv-07390 was filed on October 7, 2019.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making materially false and/or misleading statements, as well as failing 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.
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, 2U's stock fell from $59.93 on May 7, 2019 to $44.77 on May 8, 2019—a $16.16 or a 25.30% drop.
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, 2U's stock fell from $36.50 on July 30, 2019 to $12.80 on July 31, 2019—a $23.70 or a 64.93% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding 2U's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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