TWOU CLASS ACTION NOTICE: The Law Offices of Frank R. Cruz Files Securities Fraud Lawsuit Against 2U, Inc.

The Law Offices of Frank R. Cruz announces that it has filed a class action lawsuit in the United States District Court for the District of Maryland captioned Beaumont v. 2U, Inc. et al (Case No. 8:24-cv-01723) on behalf of persons and entities that purchased or otherwise acquired 2U, Inc. (“2U” or the “Company”) (NASDAQ: TWOU) securities between February 9, 2022 and February 12, 2024, inclusive (the “Class Period”). 2U investors have until August 12, 2024 to file a lead plaintiff motion.

Investors are hereby notified that they have until 60 days from this notice to move the Court to serve as lead plaintiff in this action.

If you are a shareholder who suffered a loss, click here to participate.

On November 9, 2023, after the market closed, the Company announced that 2U and 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.” The Company disclosed these portfolio management activities would offset a 21% decrease in full course equivalent enrollment, which was primarily driven by “the impact of [its] transition to a new marketing framework in mid-2022.” The Company also revealed fiscal quarterly results, showing Degree Program revenue was flat year over year, that total revenue had decreased 1%, and that the Alternative Credential Segment revenue decreased 3%.

On this news, 2U’s share price fell $1.35, or 56.72% to close at $1.03 on November 10, 2023, on unusually heavy trading volume.

Then, on February 12, 2024, after the market closed, 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 (i.e., fees negotiated for early partnership contract termination) 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. The Company also announced its full year revenue of $946 million, significantly missing the Company’s guidance of $965 million to $990 million, and revealed Degree Program Segment revenue, Alternative Credential Segment Revenue, and total revenue, all decreased 2% year over year. The Company also issued full year 2024 guidance, estimating revenue would continue to decline from $946 million, to $805 million to $815 million.

On this news, 2U’s share price fell $0.55 or 59.33%, to close at $0.37 on February 13, 2024, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (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; (4) accordingly, the Company had overstated the stability and/or longevity of its contractual agreements and/or revenue sources; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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If you purchased 2U securities during the Class Period, you may move the Court no later than 60 days from this notice to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased 2U securities, have information or 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 Frank R. Cruz, of The Law Offices of Frank R. Cruz, 2121 Avenue of the Stars, Suite 800, Los Angeles, California 90067 at 310-914-5007, by email to info@frankcruzlaw.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

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TWOU CLASS ACTION NOTICE: The Law Offices of Frank R. Cruz Files Securities Fraud Lawsuit Against 2U, Inc.