A suspected securities lawsuit has been filed against an online learning company that allegedly tried to take advantage of the COVID-19 epidemic but was not prepared. K12 Inc., Nathaniel A. Davis and Timothy Medina filed in the U.S. District Court in Alexandria, Virginia, on Friday, accuse Herndon, Virginia-based company, of falling to $ 27.21 on September 18 from about $ 43 on July 15 after reports that it failed to cope with the increased workload. The trial was first reported by D&O Diary.
According to the complaint, K12, which had a history of reporting disappointing economic results during the ten-month period before school closed in March, saw "Unique opportunity" to renew itself in the fast-growing market for online education after the pandemic.
It consequently launched an intensive campaign to convince the stock market that it was "well positioned and technically capable" of meeting the "massive increase" of students, parents and teachers turning to online education.
The lawsuit accuses the company and then spreads "dozens of false and misleading statements" about its technical capability. However, it accuses that K1
The lawsuit accuses the company and its executives of violating the Securities Act and seeks class certificates, damages and attorney's fees.
Mr. Davis and Mr. Medina are the company's CEO and CFO, respectively.
The company said in a statement, "We do not comment on allegations or ongoing disputes."