Stride(US:LRN) Globenewswire·2025-11-10 18:46Core Viewpoint - Hagens Berman is investigating Stride, Inc. for potential violations of U.S. securities laws following 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 that were negatively impacted by a major platform disruption, which caused the company to miss between 10,000 and 15,000 enrollments out of a total of 247,700 [6]. - CEO James Rhyu acknowledged that the implementation of the upgraded platform did not go as planned, resulting in higher withdrawal rates and lower conversion rates than expected [6]. - The company's guidance for 2026 forecasts only 5% sales growth, a significant decrease from the annualized sales growth of 19% over the past five years, prompting a cautious market response [6]. Group 2: Fraud Allegations - Prior to the current investigation, a complaint was filed by Gallup-McKinley against Stride, alleging fraud and deceptive practices that prioritized profits over student welfare, which led to an 11% drop in stock price [3][4]. - Allegations include artificially inflating student enrollment figures by including "ghost students," increasing student-to-teacher ratios to boost profit margins, and employing insufficiently licensed teachers [7]. - The company is also accused of using unlawful business practices to lower overhead costs intentionally, thereby inflating stock values [7]. Group 3: Investor Actions - Hagens Berman is urging investors who have suffered significant losses to submit their claims and is seeking individuals with knowledge that may assist in the investigation [2][5]. - The firm is also encouraging whistleblowers with non-public information regarding Stride to consider their options to aid in the investigation, with potential rewards under the SEC Whistleblower program [9].