Lead Plaintiff Deadline: 01/20/2020
SUMMARY OF CASE:
A securities class action has been filed against Grubhub Inc. (GRUB) on behalf of all purchasers of the common stock of Grubhub between July 30, 2019 through October 28, 2019. This case has been filed in the USDC – N.D.IL.
The Complaint alleges that during the Class Period, defendants represented to investors that these significant investments were paying dividends, and that Grubhub was continuing to economically attract “highquality” diners, even as it expanded into new markets. Defendants claimed that these new customers had laid the foundation for “economically sustainable growth in all types of markets” and rejected the suggestion that they possessed “any data that suggest[ed] [that the new users were] using multiple different services or different apps.” Instead, defendants stated that competitive dynamics had already been fully accounted for in the Company’s fiscal plans.
These and similar statements during the Class Period were materially false and misleading when made. Specifically, defendants failed to disclose, inter alia, that: (i) customer orders were actually declining, despite the massive investments that 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 partnerships had failed, and Grubhub needed to engage in the same aggressive nonpartnered 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.