The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of 2U, Inc. (NASDAQGS: TWOU) who purchased shares between February 26, 2018 and July 30, 2019. The action, which was filed in the United States District Court for the Southern District of New York, alleges that the Company violated federal securities laws.
(a) 2U’s business model was fundamentally flawed because the Company’s costs were growing disproportionately as it grew in size and complexity; (b) 2U could not take advantage of the promised economies of scale because its costs to attract each marginal student were actually increasing, not decreasing, as represented; (c) 2U was facing heightened competitive headwinds as alternative offerings flooded the marketplace and universities developed online courses in-house; (d) 2U’s growth rate in student enrollment was decelerating and was poised to decline as the Company reached market saturation; (e) 2U’s growth strategy was unsustainable, as the Company faced accelerating costs and had insufficient capital to achieve positive cash flows, improve margins or continue its revenue growth; and (f) as a result of (a)-(e), above, Defendants lacked any reasonable basis to issue 2U’s projections and financial forecasts.
Shareholders have until October 7, 2019 to petition the court for lead plaintiff status. Your ability to share in any recovery does not require that you serve as lead plaintiff. You may choose to be an absent class member.
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