What happened
Shares of online education company 2U (TWOU -8.15%) were up 20.9% today as of 11:20 a.m. ET. The surge is due to a story that Indian virtual education conglomerate Byju's submitted a buyout offer worth $1 billion, or about $15 per share, as first reported by Bloomberg.
So what
This is not the first surfacing of rumors regarding a 2U buyout. In May, investors got wind of Byju's holding talks with both 2U and fellow online education company Chegg (CHGG 0.85%), with rumors holding that Byju's might be interested in one or both of the companies in a push for expansion into the U.S. As of today, it looks like it's 2U that's receiving the offer, though no official announcement has been made that the board of directors has accepted an acquisition deal.
A potential buyout at $15 per share would be a 61% premium to the stock's price as of market close on Tuesday, June 28, and a more than 30% premium to the stock's price as of this writing.
Now what
It's been a rough ride for 2U shareholders. An accepted buyout would be a small reprieve given that the share price is currently 90% off all-time highs reached in 2018. In fact, $15 a share is barely above the $13 per share 2U fetched at the time of its IPO back in 2014.
The online education space still holds a lot of promise, but it hasn't panned out as an investment thus far. Other players in this space, such as Chegg and Coursera (COUR 0.42%), haven't fared much better. Byju's seems to have the momentum, but it is not a publicly traded company at this juncture.
