There is a lot of money to be made (or lost) in education

Do I need to write a comment on this?   -gfb

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Strayer Education, Washington Post shares tumble on Apollo warning

WASHINGTON BUSINESS JOURNAL – BY Tucker Echols

Shares of Arlington-based Strayer Education Inc. tumbled 15 percent and Washington Post Co. stock fell 8 percent Thursday after rival for-profit education firm Apollo Group Inc. warned of a drop in enrollment due to greater regulatory scrutiny. The Post’s Kaplan education division is its strongest source of revenue.

Apollo Group (NASDAQ: APOL) stock fell $12.47, or 25 percent, to $37 as investors reacted to the company’s statement that it was withdrawing its business outlook for fiscal year 2011. The company cited, “on-going regulatory scrutiny which has led to heightened media attention much of which has been negative.” Apollo, which operates The University of Phoenix, said that, “various external factors could result in a decline in new degree enrollments in excess of 40 percent year-over-year.”

Stock in Strayer (NASDAQ: STRA) declined as much as $24.95 to $132.10 in Thursday trading. Washington Post shares (NYSE: WPO) fell as much as $33.81 to $394.80.

The warning from Apollo indicates investors’ worst fears of the summer may be realized. Enrollment gains have been the backbone of Strayer Education’s soaring revenue and expanding Strayer University campuses. But that growth path was called into question in August when federal officials said they were considering new rules to ensure that students of post-secondary educational institutions are able to find jobs and are not overburdened with debt.

Read more: Strayer Education, Washington Post shares tumble on Apollo warning – Washington Business Journal


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2 CommentsLeave a comment

  1. You are a statistical genius, but perhaps could use a little grounding in business.

    The item mentions no revenue or profit figures (those two numbers are different, unbeknownst to many “media” people). You can’t tell from mere stock prices that there is a lot of money to be be made. BTW, most orgs running charters and otherwise serving the “public schools” market are not making money, but rather losing money. But that is another story.

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    • I ain’t no statistical genius. However, it doesn’t take a lot of business acumen to realize that these for-profit companies wouldn’t be heavily involved in trying to replace the public schools if they thought it was impossible to make a buck or two (or a zillion). Yes, most business startups probably fail. But that doesn’t stop investors from hoping that their enterprise will succeed where others have gone bust.
      All the more reason to keep public schools public: we don’t want our school system littered with the corpses of thousands of failed, bankrupt private for-profit schools.

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