Stride(US:LRN) Globenewswireยท2025-09-25 21:51Core Viewpoint - Stride, Inc. faces significant market backlash following a formal complaint from Gallup-McKinley school district alleging fraud and deceptive practices, leading to a notable decline in its stock price [1][6]. Company Overview - Stride, Inc. is an education technology company that provides an online learning platform primarily funded by taxpayer dollars through sales to virtual and blended public schools [3]. Allegations and Investigations - The complaint alleges that Stride engaged in fraudulent activities, including inflating student enrollment figures and prioritizing profit over educational compliance [1][5]. - Hagens Berman, a national shareholders rights firm, has initiated an investigation into whether Stride misled investors regarding its business practices and disclosure controls [2][4]. - Specific allegations include: - Contracting violations by disregarding New Mexico state laws to secure contracts improperly [8]. - Inflating reported student enrollment by including students who never officially started or were absent for extended periods [8]. - Increasing student-to-teacher ratios to boost profit margins and employing inadequately licensed teachers [8]. - Engaging in market manipulation through unlawful business practices to inflate stock values [8]. Market Reaction - Following the news of the complaint, Stride's stock price dropped by $18.60, or 11%, indicating severe market reaction to the allegations [6].