Stride(US:LRN) Globenewswireยท2025-10-29 22:37Core Viewpoint - Hagens Berman is investigating Stride, Inc. for potential violations of U.S. securities laws due to significant operational issues and fraud allegations that have led to a sharp decline in the company's stock price [1][4]. Group 1: Operational Issues - Stride reported Q1 earnings overshadowed by a major operational issue and cautious guidance, which triggered a sell-off in the stock [2]. - The company experienced significant disruptions while implementing an upgraded platform, resulting in an estimated loss of 10,000 to 15,000 enrollments, impacting its total enrollment of 247,700 [5]. - CEO James Rhyu acknowledged the implementation issues, stating that the poor customer experience led to higher withdrawal and lower conversion rates than expected [5]. Group 2: Financial Guidance - Stride's guidance for 2026 forecasts only 5% sales growth, a significant slowdown from the annualized sales growth of 19% over the past five years, raising concerns among investors [5]. Group 3: Fraud Allegations - Prior allegations against Stride include claims of fraud, deceptive practices, and prioritizing profits over student welfare, leading to a stock price drop of $18.60, or 11% [3]. - Allegations include artificially inflating student enrollment figures with "ghost students," increasing student-to-teacher ratios to boost profit margins, and employing insufficiently licensed teachers [6]. - The company is also accused of using unlawful practices to lower overhead costs to inflate stock values [6].