Brian Grosso
Investment advisor, long only, long-term horizon, value

Apollo: Unattractive Risk-Reward Proposition

So the news is out as of Wednesday: Apollo Group's (NASDAQ:APOL) University of Phoenix and Western International University subsidiaries both avoided Probation. Instead they had their accreditation statuses reaffirmed until 2023 but got placed on Notice. Notice is a lesser sanction than Probation. Probation means that a company is currently out of compliance with HLC criteria. Notice essentially means that if an institution keeps doing what it's doing, it will eventually be out of compliance and hence deserve Probation status at that point.

The stock opened much higher Thursday in reaction to the news, but drifted downward to Friday's close.

(click to enlarge)

Such strange price movement suggests that investors are uncertain what to make of the news....

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