|Status||Class Action Complaint Filed|
NEW YORK, January 2, 2020 –Bragar Eagel & Squire, P.C., a nationally recognized shareholder law firm, announces that a class action lawsuit has been filed in the United States District Court for the Northern District of Illinois on behalf of investors that purchased Grubhub, Inc (NYSE: GRUB) securities between July 30, 2019 and October 28, 2019 (the “Class Period”). Investors have until January 20, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On October 28, 2019, Grubhub announced disappointing financial results for its third fiscal quarter of 2019. The Company revealed that an important Company demand metric, daily average grubs, had actually fallen 6% sequentially despite an increase in active diners and the Company’s highly touted demand initiatives. Defendants also decreased Grubhub’s 2019 earnings and revenue projections and stated that the Company would achieve only $100 million in EBITDA for 2020, more than 70% below market expectations.
On this news, Grubhub stock decreased more than 40% on October 29, 2019, to close at $33.11 per share.
The complaint, filed November 21, 2019, alleges that during the Class Period defendants made false and misleading statements and/or failed to disclose adverse information regarding Grubhub’s business and prospects. Specifically, defendants failed to disclose, among other things, that: (i) customer orders were actually declining, despite the massive investments the Company had made to spur demand for and use of its platform; (ii) Grubhub’s new customer additions were generating significantly lower revenues as compared to historic cohorts because these customers were more prone to using competitor platforms; (iii) Grubhub’s vaunted business model under which it secured exclusive restaurant partnerships had failed, and Grubhub needed to engage in the same aggressive non-partnered sales tactics embraced by its competitors to generate significant revenue growth; (iv) Grubhub was required to spend substantial additional capital in order to grow revenues and retain market share in the face of heightened competitive dynamics and market saturation, eviscerating the Company’s profitability; and (v) Grubhub was tracking tens of millions of dollars below its revenue and earnings guidance and such guidance lacked any reasonable basis.
If you purchased Grubhub securities during the class period, are a long-term stockholder, have information, 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 Brandon Walker or Melissa Fortunato by email at firstname.lastname@example.org, or telephone at (212) 355-4648, or by filling out the contact form below. There is no cost or obligation to you.