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Large-cap Watch List member Sallie Mae (SLM), which has long benefited from government benevolence, fell 9% yesterday when investors realized that political favors can be both granted and taken away. As Yahoo reports:

Sallie Mae Blasts Bush Budget Cuts

“The cuts proposed today by the president to the private-sector student lending program, which currently serves 80 percent of all student borrowers, would have far-reaching consequences for students and taxpayers,” Sallie Mae said in a statement.

Not to mention the other 95% of the chairman’s stockholdings.

SLM Corporation announced that Albert L. Lord, chairman, sold 400,000 shares of SLM common stock, less than 5 percent of his holdings, on the open market in transactions that were completed last week.

Those struggling to pay for education take note: despite the hit to his remaining wealth, Lord’s sale last week allowed him to net $1.6 million more than it would have this week, enough to cover 53 student-years at Harvard.

SLM 1-yr chart:

SLM 1-yr chart

Source: Sallie Mae's Hard Lesson: Washington Giveth, Washington Taketh Away