Is there any transparency into how the numerous lawsuits have affected 2u financially? Suing (department of Ed) or being sued. Is there a tangible impact?
3 replies (most recent on top)
Should more so be looking at the $ 2U was sued for to pay out investors for falsifying info…
37 million is not a small amount.
https://news.bloomberglaw.com/securities-law/2u-investors-reach-37-million-settlement-with-online-educator
TL;DR: It hasn't been a big impact and the litigation expense seems to be declining year over year. They plan to spend 2.7 million on "transaction and integration expense, and stockholder activism and litigation-related expense" in 2023.
Longer answer:
"certain litigation-related costs, consisting of fees for certain non-ordinary course litigation and other proceedings" is baked into the adjusted EBITDA on the financial statements. The line item is simply "other" on the "Adjusted EBITDA Reconciliations" (which tells us what their definition of "adjusted" means, compared to standard "GAAP"). The definition of "other": "Includes (i) transaction and integration expense and (ii) stockholder activism and litigation-related expense."
You can see this line item has been declining year over year:
2019: 20.3 million.
2020: 9.7
2021: 19.3
2021: 3.3
2023: 2.7
Source: 2U, Q2 2023.
Suing the Department of Education seems more like a stall tactic to delay the inevitable aka a thorough review of the company's business practices and deeper examination of how hundreds of millions in federal student loan money has been spent over the past decade. Has Chip endorsed Trump or Vivek yet? Might be his only hope!