SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-grubhub-class-action-lawsuit.html) today announced that it filed a class action seeking to represent purchasers of Grubhub Inc. (NYSE:GRUB) common stock during the period between July 30, 2019 and October 28, 2019 (the “Class Period”). This action was filed in the Northern District of Illinois and is captioned Azar v. Grubhub Inc., et al., No. 19-cv-07665.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Grubhub common stock during the Class Period to seek appointment as lead plaintiff in the Grubhub class action lawsuit. A lead plaintiff acts on behalf of all other class members in directing the Grubhub class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Grubhub class action lawsuit. An investor’s ability to share in any potential future recovery of the Grubhub class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Grubhub class action lawsuit, you must move the Court no later than 60 days from today. If you wish to discuss the Grubhub class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-grubhub-class-action-lawsuit.html.
The Grubhub class action lawsuit charges Grubhub and certain of its officers with violations of the Securities Exchange Act of 1934. Grubhub is one of the nation’s leading online and mobile platforms for restaurant pick-up and delivery orders. The Company was an early entrant into the online delivery market and for many years maintained dominant market share, controlling approximately 40% of the market in early 2018.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Grubhub’s business and prospects. Specifically, defendants failed to disclose, among other things, that: (i) customer orders were actually declining, despite the massive investments the Company had made to spur demand for and use of its platform; (ii) Grubhub’s new customer additions were generating significantly lower revenues as compared to historic cohorts because these customers were more prone to using competitor platforms; (iii) Grubhub’s vaunted business model under which it secured exclusive restaurant partnerships had failed, and Grubhub needed to engage in the same aggressive non-partnered sales tactics embraced by its competitors to generate significant revenue growth; (iv) Grubhub was required to spend substantial additional capital in order to grow revenues and retain market share in the face of heightened competitive dynamics and market saturation, eviscerating the Company’s profitability; and (v) Grubhub was tracking tens of millions of dollars below its revenue and earnings guidance and such guidance lacked any reasonable basis.
On October 28, 2019, Grubhub announced deeply disappointing financial results for its third fiscal quarter of 2019. The Company revealed that an important Company demand metric, daily average grubs, had actually fallen 6% sequentially despite an increase in active diners and the Company’s highly touted demand initiatives. Defendants also slashed Grubhub’s 2019 earnings and revenue projections and stated that the Company would achieve only $100 million in EBITDA for 2020, more than 70% below market expectations. On this news, Grubhub stock closed down more than 40% on October 29, 2019 on extremely heavy trading volume.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.