NEW YORK, Dec. 12, 2020 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of K12 Inc. (“K12” or the “Company”) (: LRN). Such investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 7980.
The investigation concerns whether K12 and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
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K12 operates virtual learning systems. As a consequence of the COVID-19 pandemic, school districts across the U.S. have increasingly shifted learning activities to online and blended instruction, creating a unique opportunity for K12 to acquire a significant stake in the rapidly growing market for online education. On August 26, 2020, reports began to surface that teachers in the Miami-Dade County school system were extremely unprepared for the new school year because they were unfamiliar with K12’s learning platform, and lacked “hands-on experience” and “adequate training for [K12’s online learning platform].” The United Teachers of Dade President Karla Hernandez-Mats issued a statement, in which she disclosed that the “the training for K12 has been ineffective and the time allotted to learn it has been unacceptable.”
On this news, K12’s stock price fell $5.87 per share, or 13.5%, over the following two trading days, to close at $37.70 per share on August 27, 2020.
After classes began, 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. By the third day of classes, September 2, 2020, Miami-Dade County students and teachers reported numerous additional technical issues and a total of twelve intermittent cyberattacks that led to K12’s learning platform effectively being dysfunctional. In response to the ensuing complaints by parents, the 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 disclosed 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, K12’s stock price fell $3.96 per share, or 10.2%, over the following two trading days, to close at $34.89 per share on September 3, 2020.
The following week, after another Board meeting, the Miami-Date Public Schools Board voted to terminate its $15.3 million contract with K12 on September 10, 2020. On this news, K12’s stock price fell $3.21 per share, or 9.5%, to close at $30.55 per share 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. Shortly thereafter, a member of the Beaufort County School District board 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 was duly terminated two days later.
On this news, K12’s stock price fell $1.09 per share, or 3.9%, to close at $27.21 per share on September 18, 2020.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980
