RM LAW, P.C. announces that a class action lawsuit has been filed on behalf of all persons or entities that purchased Grubhub Inc. (“Grubhub” or the “Company”) (NYSE: GRUB) common stock between July 30, 2019 and October 28, 2019, inclusive (the “Class Period”).
Grubhub shareholders may, no later than January 21, 2020, move the Court for appointment as a lead plaintiff of the Class. If you purchased shares of Grubhub and would like to learn more about these claims or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free at (844) 291-9299 or to sign up online, click here.
On October 28, 2019, Grubhub announced disappointing financial results for its third fiscal quarter of 2019, revealing that an important demand metric, daily average grubs, had actually fallen 6% sequentially despite an increase in active diners. The Company slashed 2019 earnings and revenue projections, and expected only $100 million in EBITDA for 2020, more than 70% below market expectations.
On this news, Grubhub share price fell $25.28, or over 43%, to close at $33.11 per share on October 29, 2019, thereby injuring investors.
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, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that customer orders were actually declining, despite the massive investments the Company had made to spur demand for and use of its platform; (2) that 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; (3) that 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; (4) that 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 (5) that as a result, Grubhub’s public statements were materially false and misleading at all relevant times.
If you are a member of the class, you may, no later than January 21, 2020, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain RM LAW, P.C. or other counsel of your choice, to serve as your counsel in this action.