2U Inc (TWOU)

[MiamiGent]

TWOU Some A B C's why 2U Inc. is tanking and good bet to continue doing so..

Disclosure: I am short TWOU.

http://stockcharts.com/h-sc/ui?s=TWOU


2U Inc. (TWOU) is a recent IPO (March 28, 2014), in business since 2008 offering on-line education structure for colleges.

A) 2U Inc. is in a competitive industry. Keen competitors like Pearson (PSO) (1.2B Cash) and Wiley (JWA) (486M Cash) are already established on-line learning servers versus relative newcomer 2U Inc (TWOU) (7M Cash).

B) 2U's net loss this second reporting quarter was -$10.595M versus the first reporting quarter (March 31, 2014) of -8.895M and currently carries $92.02M negative shareholder equity!
"We have incurred significant net losses since inception, and we expect our operating expenses to increase significantly in the foreseeable future."

C) Lockup expiring September 24, 2014 and may have already started from the looks of current pop and drop:
"As of April 30, 2014, we had outstanding 40,212,605 shares of common stock outstanding. Of these shares, substantially all will be available for sale in the public market beginning September 24, 2014 following the expiration of lock-up agreements between the underwriters and our officers, directors, holders of much of our outstanding common stock. The representatives of the underwriters may release these stockholders from their lock-up agreements with the underwriters at any time and without notice, which would allow for earlier sales of shares in the public market."
First opportunity to sell as new company in April saw at least 3 insiders dump 1.054M shares . Expecting more of same by end of Sept.

My first target is 13.63, next is $13 (the IPO price) and on down (many options were granted at 3.53).

Not fully reporting:
"We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and we intend to take advantage of some of the exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation..."

All in my opinion,
MG

Further Disclosure: Do your own research before investing.
I am not a professional.
Stock trading is very dangerous. You could lose all your money- many have.


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