Solomon

Herbalife President Falsified Credentials - Barry Minkow

So what?

What does any of this have to do with the financial performance of the company.

News flash - People lie, cheat and steal.

Bush lied about WMDs, Clinton did not sleep with that woman. Barry Minkow did hard time, convicted of felony fraud, before "finding Christ".

All this fraud talk is an attempt by Minkow to make money shorting HLF because based on fundamentals, high growth rate of sales and earnings, the stock should appreciate from here.

Apollo Group Needs an Accounting Refresher

The reclass is not the main issue with the stock, though perhaps indicative of sloppy management.

APOL is over-valued on a P/E and cash flow basis, has a rising cost structure, and facing higher student acquisition costs and slowing enrollment growth due to reduced availability and higher cost of student loans.

The result, lower expected earnings and a lower multiple - sellers outnumber buyers and the stock has fallen dramatically.

That's what the shorts thought before the recent conference call. What is the incremental call, here?

Seems like the sector and market want to bounce off lows here. APOL noted on the call that they have material buy-back availability in their stock repurchase plan.

Comparable, STRA announced it's earnings date of on 4/30/08 pre-market, with a 10 am eastern time conference call. Expected EPS $1.58 vs. $1.30 prior year.

Look for more indications of stress on student borrowers in form of bad debt, fewer student loans, more loans above limits, slowing enrollment growth.

In related news, CIT and Northstar announced exits from the student loan business today.

Analysts and current institutions are defending the stock with positive comments, but lowering price targets. Executives are net sellers of their shares and exercised options.

If STRA evidences this weakness in student enrollment growth, expect to see APOL and other sectors companies' shares under pressure.

A Second Look at Educational Services and Student Lending Problems

How do the companies compute the percentage of revenue tied to private loans?

Is $25 Million Enough for Hoku?

To answer your question, this is a $25 MM equity deal, meaning all $25 MM is equity.

Deal adds confidence HOKU can meet May 31, 2008 deadline to close on remaining financing with Merrill or another lender(s) / financier(s).

Demand for polysilicon is projected to exceed supply through 2013.

HOKU's value is that it can collect $240 MM of advance customer deposits in cash today.

It will use these funds to build it's plant. This cash will eventually be booked as revenue and potentially profits.

Future milestones that will impat the shares include a potential $185 MM debt financing, various construction and production milestones, and eventually product shipments.

Shares have the potential to trade up materially from current start-up valuation levels if the company achieves its milestones.