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Why Shares of 2U Dropped Today

By Timothy Green - Updated Mar 9, 2020 at 11:47AM

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The software stock got caught up in a rough day for the stock market.

What happened

Shares of 2U (TWOU 8.96%) slumped on Monday along with the broader market. The education-focused software-as-a-service provider has been dragged up and down by a tumultuous stock market in recent days. Last Wednesday, the stock soared for no reason as the major stock indices rallied.

This time around, the stock is sinking amid a deep stock market sell-off. 2U stock was down about 7.6% at 11 a.m. EDT.

So what

It's unclear how the novel coronavirus outbreak that's causing some of the recent stock market volatility will affect 2U. The company sells cloud-based software to universities and nonprofit colleges that enable online learning, so it could benefit if schools in the U.S. are forced to move online-only for a while as the outbreak runs its course.

A downward-sloping arrow in front of a wall of numbers

Image source: Getty Images.

On the other hand, predicting anything about how individual companies will fare in this unprecedented situation is difficult. The stock is up since the beginning of February, but it took a beating on Monday along with the rest of the stock market.

Now what

For long-term investors, these day-to-day fluctuations in the stock price don't mean much. Ultimately, what matters is the company's performance.

Shares of 2U are up about 37% over the past six months, but that rally was preceded by a steep decline. Over the past year, 2U stock has lost 63% of its value.

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