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For-profit education stocks rally as some bubbling enthusiasm over financial aid legislation is...

For-profit education stocks rally as some bubbling enthusiasm over financial aid legislation is just enough to pressure short sellers in the sector. Gainers: ITT Educational Services (ESI) +10.2%, Career Education (CECO) +11.5%, Corinithian Colleges (COCO) +15.3%, Lincoln Education (LINC) +5.2%, Education Management (EDMC) +5.5%, Bridgepoint Education (BPI)+4.4%, Devry (DV) +3.1%, Capella Education (CPLA) +5.5%,
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Comments (1)
  • Onepaw
    , contributor
    Comments (32) | Send Message
     
    Yup, this is a shorter market and it always has been.

     

    It means two things. The first is the dependency that this sector has upon successful lobbying. Any hint that the sector has purchased a reprieve from its destined bursting bubble is good. Companies such as Apollo and EDMC have spend hundreds of millions so that shorters can dart in and out before the student loan industry is again examined. At some point, coming sooner than later, companies such as EDMC will have to account for the fact that they charge as much as Ivy League schools do for EDMC degrees that may not even have the market value of a GED.

     

    The second is a blatant unveiling of the nature of the industry. It does not sell education, rather it brokers loans to students who could not otherwise compete for educations. It is a long way from a healthy situation when EDMC is awaiting the next phase of the $12 Billion DOJ lawsuit, and the 80 or so related actions against it. None of these actions, win or loose, will support any claim to educational merit or credibility on the part of EDMC.
    17 May 2013, 04:23 PM Reply Like
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