SAN DIEGO & CHICAGO--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP announces that a purchaser of Grubhub, Inc. (NYSE: GRUB) filed a class action complaint for alleged violations of the Securities Exchange Act of 1934 between July 30, 2019 and October 28, 2019. Grubhub provides an online and mobile platform for restaurant pickup and delivery orders in the United States.
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Grubhub, Inc. (GRUB) Accused of Misleading Investors
According to the complaint, in October 2018, Grubhub touted its strategic investments, with its CEO stating that "with…improved market effectiveness, increased marketing investment, more market expansion, and a rapidly growing restaurant selection, [Grubhub] believe[s] [its] efforts will yield more growth…for years to come." Throughout the relevant period, the online delivery service industry was becoming increasingly competitive as more companies entered the market and engaged in a "price war." However, Grubhub assured investors that its business model and exclusive partnerships would allow it to continue to profitably increase its user base. Contrary to these representations, Grubhub's customer orders were actually declining and its new customers were generating significantly lower revenues than previous cohorts due to their propensity to use competitor platforms. Consequently, on October 28, 2019, Grubhub announced deeply disappointing financial results, revealing a 6% decline in the daily average orders and a 2020 EBITDA slashed by more than 70% below market expectations. On this news, Grubhub's stock fell $25.28, more than 40%, to close at $33.11.
Grubhub, Inc. (GRUB) Shareholders Have Legal Options
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