Title: 2U Stock Plummets After Chapter 11 Bankruptcy Filing – What Investors Need to Know
2U (NASDAQ:TWOU) stock is facing a sharp decline following the company’s decision to file for Chapter 11 bankruptcy protection. This move is part of a Restructuring Support Agreement with lenders, providing 2U with $110 million in new capital and reducing its debt by over 50% to $459 million. The company aims to exit bankruptcy by the end of September and is seeking court approval for $64 million in financing to sustain operations during this process.
2U CEO Paul Lalljie expressed confidence in the company’s ability to continue its mission with the new capital and healthier balance sheet. However, investors are reacting negatively to the news, with the stock dropping 70.6% on Thursday morning. This adds to a challenging year for 2U, with the stock down 88.3% year-to-date as of Wednesday’s market close.
In conclusion, 2U’s bankruptcy filing has significant implications for investors, as it reflects the company’s efforts to address financial challenges and reposition itself for future growth. It is essential for investors to closely monitor developments and assess the impact on their investment portfolios.