Bernstein Liebhard, a nationally acclaimed investor rights law firm, announces that a securities class action has been filed on behalf of investors that purchased or acquired the securities of Grubhub Inc. (“Grubhub” or the “Company”) (NYSE: GRUB) between July 30, 2019 and October 28, 2019, inclusive (the “Class Period”).
If you purchased Grubhub securities, and/or would like to discuss your legal rights and options, please click “Join Class Action” above.
New York, New York — Bernstein Liebhard, a nationally acclaimed investor rights law firm, announces that a securities class action has been filed on behalf of investors that purchased or acquired the securities of Grubhub Inc. (“Grubhub” or the “Company”) (NYSE: GRUB) between July 30, 2019 and October 28, 2019, inclusive (the “Class Period”). The lawsuit filed in the United States District Court for the Northern District of Illinois alleges violations of the Securities Exchange Act of 1934.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’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.
On October 28, 2019, Grubhub announced deeply disappointing financial results for its third fiscal quarter of 2019. The Company revealed that an important Company demand metric, daily average grubs (“DAGs”), had actually fallen 6% sequentially despite an increase in active diners and the Company’s highly touted demand initiatives. Defendants also slashed 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 closed down more than 40% on October 29, 2019 on extremely heavy trading volume.
If you wish to serve as lead plaintiff, you must move the Court no later than January 21, 2020. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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