NEW YORK--(BUSINESS WIRE)--Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Eastern District of Virginia on behalf of investors that purchased K12, Inc. (NYSE: LRN) common stock between April 27, 2020 and September 18, 2020 (the “Class Period”). Investors have until January 19, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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K12 is a technology-based education company that provides proprietary and third-party educational curriculum, teacher training, administrative support, information technology support, software systems and educational services. The Company operates virtual learning systems worldwide.
Contrary to the facts asserted by K12, reports began to surface that K12’s training for teachers in Miami-Dade County—one of the nation’s largest school districts—had been woefully inadequate.
On this news, the price of K12 common shares sharply fell by 7% over the course of two trading days, to close at $37.70 on August 27, 2020.
Once classes began on August 31, 2020, the situation worsened. K12 experienced major technical issues and disruptions with teachers and students of Miami-Dade County being unable to even log into the platform and utilize its contents, which prompted local officials to publicly scold K12 for being “not ready” for the opening of the school year. In response to the overwhelming amount of complaints by outraged parents, Miami-Dade County School District called a Board meeting to discuss K12’s many failures. During the meeting, Miami-Dade County Public Schools Superintendent Alberto Carvalho revealed that he never signed the $15.3 million no-bid contract with K12 and the school district had never paid K12 for the provision of its services and products.
On this news, the price of K12 common shares fell 10.5% over the course of two trading days, to close at $34.89 on September 3, 2020.
A week later, after another Board meeting that lasted for over 13 hours and included 400 speakers, the Miami-Dade County Public Schools Board voted to terminate their $15.3 million contract with K12 on September 10, 2020.
On this news, the price of K12 common shares again fell drastically, by 11.5%, to close at $30.55 on September 10, 2020.
Meanwhile, the Beaufort County School District in South Carolina engaged K12 to provide virtual learning programs for their students. However, the introduction of the program had to be delayed until the second week of instruction. Soon after, Beaufort County School District board member John Dowling stated that he had lost confidence in K12’s ability to provide educational solutions for the district and moved to terminate the contract, which happened two days later.
On this news, the price of K12 common shares fell 4.9%, to close at $27.21 on September 18, 2020.
The complaint, filed on November 19, 2020, alleges that throughout the Class Period defendants made materially false and misleading statements, and failed to disclose material adverse facts about the Company’s business, operational, and compliance policies. Specifically, defendants made false and/or misleading statements and failed to disclose to investors that: (i) K12 lacked the technological capabilities, infrastructures, and expertise to support the increased demand for virtual and blended education necessitated by the global pandemic; (ii) K12 lacked adequate cyberattack protocols and protections to prevent the disabling of its computer system; (iii) K12 was unable provide the necessary levels of administrative support and training to teachers, students, and parents; and (iv) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s business, operations, and prospects and/or lacked a reasonable basis and omitted facts.
If you purchased K12 common stock during the Class Period and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker, Melissa Fortunato, or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
