July 24, 2020 - A complaint was filed.

November 20, 2019 - An investor in shares of Grubhub Inc. (NYSE: GRUB) filed a lawsuit in the U.S. District Court for the Northern District of Illinois over alleged violations of Federal Securities Laws by Grubhub Inc. in connection with certain allegedly false and misleading statements made between July 30, 2019 and October 28, 2019.

Chicago, IL based Grubhub Inc., together with its subsidiaries, provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. Grubhub Inc. reported that its annual Total Revenue rose from $683.06 million in 2017 to over $1 billion in 2018.

On October 28, 2019, Grubhub Inc announced its financial results for its third fiscal quarter of 2019. Grubhub Inc revealed that an important Company demand metric, daily average grubs, had actually fallen 6% sequentially despite an increase in active diners and the Company’s highly touted demand initiatives Grubhub Inc also slashed its 2019 earnings and revenue projections and stated that the Company would achieve only $100 million in EBITDA for 2020, more than 70% below market expectations. On July 15, 2019, it was reported that Grubhub Inc. (NYSE: GRUB) registered more than 20,000 web domains, many matching the names of its restaurant customers without their permission.

Another claim against the company alleges Grubhub charges erroneous fees to restaurants from phone orders generated through websites it operates. The Small Business Association is reportedly investigating these complaints and New York Senator Chuck Schumer recently demanded that Grubhub change its practices or he would seek the aid of the Federal Trade Commission. This press conference followed similar calls from New York City Council's Mark Gjonaj who asked New York Attorney General Letitia James to launch an antitrust investigation into the company.

According to the complaint the plaintiff alleges on behalf of purchasers of Grubhub Inc. (NYSE: GRUB) common shares between July 30, 2019 and October 28, 2019, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between July 30, 2019 and October 28, 2019, the defendants made false and/or misleading statements and/or failed to disclose that customer orders were actually declining, despite the massive investments the Company had made to spur demand for and use of its platform, that Grubhub’s new customer additions were generating significantly lower revenues as compared to historic cohorts because these customers were more prone to using competitor platforms, that Grubhub’s vaunted business model under which it secured exclusive restaurant partnerships had failed, and Grubhub needed to engage in the same aggressive non-partnered sales tactics embraced by its competitors to generate significant revenue growth, that Grubhub was required to spend substantial additional capital in order to grow revenues and retain market share in the face of heightened competitive dynamics and market saturation, eviscerating the Company’s profitability, and that as a result, Grubhub’s public statements were materially false and misleading at all relevant times.