Grand Canyon Education (LOPE) $25.5M Shareholder Settlement
Grand Canyon Education (LOPE) agreed to settle $25.5M with shareholders to end claims over Grand Canyon University spin-off.
Outline
Back in 2019, Grand Canyon Education was accused of secretly managing Grand Canyon University while falsely claiming that GCU was a separate, independent non-profit organisation. Following the disclosure, $LOPE significantly fell, and GCE faced a lawsuit from investors.
Timeline
September 9, 2019: Citron Research published "GCE is the Educational Enron", accusing GCE of financial manipulation.
November 6, 2019: GCE received a letter from the DOE denying GCU’s non-profit status.
November 7, 2019: After this became public, $LOPE fell 4%.
January 28, 2020: Citron Research published another report accusing GCE of financial issues. GCE’s stock dropped 8%.
May 12, 2020: GCE faced a lawsuit from investors.
Background
In July 2018, Grand Canyon Education announced that Grand Canyon University would become a separate non-profit organisation and that GCE would provide services to it.
However, in September 2019, Citron Research published a report titled "GCE is the Educational Enron," accusing GCE of financial manipulation.
The report claimed that Grand Canyon was using a "captive non-reporting subsidiary" to “dump expenses and liabilities while receiving a disproportionate amount of revenue at inflated margins in order to artificially inflate the stock price”.
On November 6, 2019, GCE received a letter from the DOE denying GCU’s application for non-profit status. This denial indicated that GCU was not operating independently as a non-profit.
On November 7, 2019, after the DOE's letter became public, $LOPE declined by 4%.
In January 2020, Citron Research released another report stating that Grand Canyon University was still controlled by Grand Canyon Education. Following this report, $LOPE dropped 8%.
After these reports, in May 2020, the City of Hialeah Employees' Retirement System filed a lawsuit against GCE, alleging that the company had misled investors about GCU's non-profit status and its financial practices.
What can investors expect now?
Grand Canyon Education (LOPE) agreed to settle $25.5M with shareholders to end claims over Grand Canyon University spin-off.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Frequently Asked Questions
All persons who purchased or otherwise acquired $LOPE during the period from January 5, 2018, through and including January 27, 2020, inclusive, and were damaged thereby.
No, if you have purchased securities within the class period, you are eligible to participate.
You can participate in the settlement and retain (or sell) your securities.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.69 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $2.76 per share.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
11thestate is an investor recovery company, we help investors to track and collect securities class action settlements. We will:
Prepare documents for your payout
Audit the claim and make sure you get the maximum possible payout
File a claim with the settlement administration
Correspond with the settlement administration to resolve emerging issues
Deliver payout directly to your brokerage account
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.