LANHAM, MD – 2U (NASDAQ:TWOU), Inc., a prepackaged software services provider, announced a reverse stock split of its common stock, which took effect on Thursday. The Delaware-incorporated company (NASDAQ:TWOU) reported the completion of a 1-for-30 reverse stock split following approval from its Board of Directors and stockholders.
The reverse stock split was approved at the annual stockholders meeting on May 20, 2024, with the Board finalizing the ratio on June 5, 2024. The amendment to the company's Certificate of Incorporation was filed with the Secretary of State of Delaware, becoming effective at 5:00 p.m. Eastern Time on June 13, 2024.
As a result of this corporate action, every thirty shares of issued and outstanding common stock were automatically combined into one new share of common stock. This adjustment also applies proportionately to the exercise prices and the number of shares underlying the company's outstanding equity awards, warrants, and shares issuable under equity incentive plans.
No fractional shares were issued in connection with the reverse stock split. Shareholders who would have received fractional shares will instead receive a cash payment, calculated based on the closing sales price of the company's common stock on The Nasdaq Global Select Market as of June 13, 2024.
Trading of the company's common stock on a split-adjusted basis began today under the existing ticker symbol "TWOU," with a new CUSIP number of 90214J200.
The information in this article is based on a press release statement from 2U, Inc. and the associated SEC filing.
In other recent news, 2U, Inc. has also reported first-quarter 2024 financial results that surpassed market expectations, with revenue of $198.4 million and an adjusted EBITDA of $17.3 million. Despite a decrease in revenue compared to the same period last year, new enrollment numbers and operational efficiency initiatives suggest a strong position for future growth.
The company has reaffirmed its full-year 2024 revenue guidance of $805 million to $815 million and adjusted EBITDA guidance of $120 million to $125 million.
In other developments, Baird has revised its price target for 2U to $1.00 from the previous $1.50, maintaining a Neutral rating on the stock. Additionally, Cathie Wood's ARK ETFs have reduced their stake in 2U, selling a total of 2,579 shares, indicating a potential strategic shift away from the online education provider.
InvestingPro Insights
In light of the recent reverse stock split announcement by 2U, Inc., a deeper look into the company's financial health and market performance through InvestingPro data reveals critical insights. With a market capitalization of just $19.15 million, the company presents a case of significant valuation contraction. The data also shows a notable gross profit margin of 72.93% for the last twelve months as of Q1 2024, underscoring the company's ability to maintain profitability in its core operations despite a challenging environment. However, this is juxtaposed with a revenue decline of 4.47% during the same period, signaling potential headwinds in sales growth.
InvestingPro Tips highlight that analysts have expressed concerns, with 5 analysts revising their earnings downwards for the upcoming period and anticipating a sales decline in the current year. Notably, the stock has experienced substantial volatility, with a total return of -94.61% over the past year, reflecting investor skepticism about the company's prospects.
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