Pearsons (PSO) Denies It is Preparing Bid for Stride (LRN)

May 18, 2021 10:21 AM EDT

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Pearsons PLC (NYSE: PSO) denied that is preparing a takeover bid for Stride (NYSE: LRN), following an earlier report from StreetInsider that it was, citing a source.

"[W]e are not preparing a bid," a Pearsons spokesperson told StreetInsider.

Stride, previously known as K12, which focuses on online learning, has seen much success during the COVID pandemic as students across the nation were locked down and found learning opportunities online. In its latest quarter, the company reported 53% revenue growth and net income rose 172%. The company also raised its FY2021 forecast.

Shares of Stride are up about 75% since late February 2020, as the pandemic started to bear down, but down nearly 50% from its August 2020 highs as some children started to return to a traditional school setting before the fall 2020 start.

While fast money has left the stock, long-term investors see an opportunity for continued growth on a shift to online education. The company stated that the percentage of current students indicting they will return next fall is at a multi-year high. In addition, surveys show an increasing percentage of high school students would consider an online high school or online career learning.

(1:53PM ET updated to add Pearsons denial)

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