On November 9, 2023, after the market closed, the Company announced that 2U and the University of Southern California (“USC”) would wind down their 15-year collaboration in the Company’s major programs, and that USC would pay approximately $40 million in connection with this exit. The Company also announced it would recognize a total of $80 million in the fourth quarter related to partners seeking a negotiated exit from certain degree programs, which the Company euphemistically referred to as “portfolio management activities.”

Following this news, 2U’s share price fell $1.35, or 56.72% to close at $1.03 per share on November 10, 2023.

Then, on February 12, 2024, 2U disclosed that, due to the Company’s debt, “there is substantial doubt about its ability to continue as a going concern.” The Company further disclosed it recognized $88.0 million of revenue from portfolio management activities in the year and it would assume another $10 million from such activities in the first quarter of 2024 and at least $15 million in full-year 2024.

Following this news, 2U’s share price fell $0.55, or 59.33%, to close at $0.37 per share on February 13, 2024.

The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors that: (1) the Company was unable to sustain relationships with key universities and organizations; (2) as a result, certain degree programs and partnerships failed to materialize or were cancelled; (3) the Company’s transition to a platform company would lead to a decrease in full course equivalent enrollments; and (4) accordingly, the Company had overstated the stability and/or longevity of its contractual agreements and/or revenue sources.

Investors who purchased or acquired 2U securities between February 9, 2022 and February 12, 2024, may no later than August 12, 2024, seek to be appointed as a lead plaintiff representative of the class.