Hagens Berman Investigates Claims Stride Misled Investors About "Ghost Students" and Poor Customer Experience
SAN FRANCISCO, Nov. 28, 2025 /PRNewswire/ -- Investor rights law firm Hagens Berman reminds investors of the January 12, 2026, deadline to move the Court for appointment as lead plaintiff in the securities fraud class action lawsuit filed against Stride, Inc. (NYSE: LRN). The lawsuit alleges that Stride, one of the nation's largest providers of online educational services, misled investors about its operational health and compliance, resulting in a stock crash of over 54% following damaging disclosures.
"The claims against Stride are particularly troubling, alleging that the company inflated enrollment figures by retaining 'ghost students' and then compounded the deception with a disastrous platform upgrade that management was aware of," said Reed Kathrein, the Hagens Berman partner leading the investigation. "We are actively scrutinizing whether executives knew of these undisclosed facts and urge investors who suffered substantial losses to contact Hagens Berman now to discuss their rights."
Key Facts for LRN Investors:
- Class Period: October 22, 2024 – October 28, 2025, inclusive.
- Lead Plaintiff Deadline: January 12, 2026.
- Case Status: Securities Class Action pending in the U.S. District Court for the Eastern District of Virginia.
- Core Allegations: The complaint alleges Stride made materially false and misleading statements regarding its business by:
- Inflating Enrollment: Retaining "ghost students" on enrollees who never officially started or were absent for extended periods.
- Ignoring Compliance: Cutting costs by increasing student-to-teacher ratios far beyond required limits and ignoring mandated special education services.
- Undisclosed Operational Failures: Concealing major technical issues from an "upgraded platform" that led to "poor customer experience," high withdrawal rates, and a devastating loss of 10,000 to 15,000 enrollments.
- Inflating Enrollment: Retaining "ghost students" on enrollees who never officially started or were absent for extended periods.
What Happened and Why it Matters:
The lawsuit stems from two distinct disclosures that revealed the Company's true condition and triggered massive stock drops:
- September 14, 2025: A public report surfaced detailing a lawsuit by a school district (Gallup-McKinley), alleging fraud and deceptive practices, including the use of "ghost students" to artificially inflate enrollment and profits. Stride's stock plunged 11% on this news.
- October 28, 2025: Stride announced its Q1 fiscal 2026 results, revealing a severe operational issue due to a failed platform upgrade. The poor customer experience and system disruption caused significant enrollment losses. Stride's stock subsequently crashed over 54% in a single day.
Hagens Berman is investigating whether Stride's management intentionally misled investors about the stability of its enrollment figures and the severity of its operational and compliance failures to artificially inflate its stock price.
Next Steps for Investors:
If you purchased Stride, Inc. securities during the Class Period (October 22, 2024 – October 28, 2025) and suffered substantial losses, you may be eligible to serve as Lead Plaintiff.
The deadline to file your motion for Lead Plaintiff is January 12, 2026.
TO SUBMIT YOUR LOSSES NOW OR FOR A CONFIDENTIAL CONSULTATION:
Visit: www.hbsslaw.com/investor-fraud/lrn
Contact the Firm Now: LRN@hbsslaw.com
844-916-0895
If you'd like more information and answers to frequently asked questions about the Stride case and our investigation, read more »
Whistleblowers: Persons with non-public information regarding Stride should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email LRN@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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SOURCE Hagens Berman Sobol Shapiro LLP
