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    Stride (LRN) Lawsuit: Was 54% Crash Caused by Alleged Undisclosed Operational Failures? Hagens Berman Investigating Pending Securities Fraud Claims

    PR Newswire·12/09/2025 17:50:00
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    Partner Reed Kathrein Scrutinizing Damages Link Between Alleged "Ghost Students" Enrollment Fraud and Disastrous Platform Upgrade

    SAN FRANCISCO, Dec. 9, 2025 /PRNewswire/ -- National shareholder rights law firm Hagens Berman alerts investors in Stride, Inc. (NYSE: LRN) to the ongoing securities class action against Stride and certain of executives. The suit seeks to recover the massive investor losses sustained after the purported disclosure of both alleged inflated enrollment figures and a catastrophic technology failure.

    Specifically, the lawsuit alleges that Stride misled investors by inflating enrollment figures (using "Ghost Students") and failing to disclose the severe operational failures that plagued its critical platform upgrade, which led directly to the shocking stock collapse.

    "The Stride case alleges a compounded deception: first, allegedly inflating enrollment numbers, and second, following that up with an operational failure that cut off access to tens of thousands of paying students," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation of the alleged claims. "We are specifically focused on the direct causation linking the company's alleged wrongdoing to the 54% single-day stock crash and the total damages suffered by investors. We urge investors who suffered substantial losses in LRN to contact Hagens Berman now to discuss their rights."

    Legal Analysis: Compounded Deception & Financial Causation

    The complaint details how two distinct, undisclosed operational failures corrected the market's misperception of Stride's true financial health, leading to the massive loss of market capitalization.

    Alleged

    Fraudulent

    Mechanism /

    Event

    Allegation & Financial Impact

    Key Legal Issues

    First Alleged

    Failure:

    Enrollment

    Fraud

    Allegedly retained "Ghost Students" on

    the books to inflate enrollment figures,

    leading to an 11% stock drop after the

    purported truth was allegedly revealed in

    the first disclosure.

    Whether the Company Misrepresented

    Core Business Metrics:     Did the company

    inflate enrollment figures and misstate

    student-to-teacher ratios?

    Second Alleged

    Failure: Tech

    Collapse

    Allegedly failed to disclose severe issues

    with a critical platform upgrade that

    blocked access for over 10,000 enrolled

    students    , stifling growth and requiring

    remediation.

    Whether the Company Concealed

    Operational Failures:     Did the company

    knowingly fail to disclose the allegedly

    disastrous technology rollout and its

    operational impact?

    The Alleged

    Damages     (Oct.

    28, 2025)

    The stock crashed 54% on the second

    disclosure, demonstrating the true severity

    of the undisclosed operational failures.

    Whether Investors Are Entitled to

    Damages    : Are Stride investors entitled to

    the losses resulting from the defendants'

    alleged compounding misstatements and

    omissions?

    Next Steps: Contact Partner Reed Kathrein Today

    Hagens Berman is a leading plaintiff litigation firm, having secured substantial recoveries for investors.

    Mr. Kathrein is actively advising investors who purchased LRN shares during the Class Period (October 22, 2024 – October 28, 2025) and suffered significant losses due to the alleged undisclosed "Ghost Student" retention scheme and the operational failures.

    The Lead Plaintiff Deadline is January 12, 2026.

    TO SUBMIT YOUR STRIDE (LRN) LOSSES NOW PLEASE USE THE SECURE FORM BELOW:

    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