We know CCi "breached the covenants of their debt." We do know the cash balance on March 31, and we know how much income from operations was generated for the quarter, both of which were effectively zero. We also know that ED has put CCi on a 21 day hold that began the day before payday, June 12. We also know that the stock has been trading below $1 for 25 trading days. We also know they owe $367M, yet have no cash. Additionally we know that Jack and company is camped out in DC trying to resolve this situation, and if it does not get resolved then CCi will likely no longer be a "going concern." We also know that ED has been asking for information for months, there are various lawsuits, and the list goes on. Will CCi meet payroll this week? I am not going to say I have sufficient information to definitively say negative, but at the same time it is only a matter of when, not if, this company fails to meet payroll and files bankruptcy. Alternatively, who is going to bail CCi out?
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People are getting pathetic at this point. Quit dreaming up BS scenarios where you keep your jobs...it's over.
Maybe CCi should close all the Everest schools and keep Heald.
I understand the point about Heald (and other brand) valuations. Market cap here is skewed, though. The problem with the acquisitions model that for-profits use is that the parent company can drag down the better-performing smaller parts. Imagine if EDMC bought Yale. As EDMC market cap continued to plummet, the value of Yale as a brand would stay high. It is a case of the Corinthian brands being worth far more individually than the whole. I assume that talks with the DOE are not about saving Corinthian, but about buying time for selling the various brands to satisfy obligations.
CCi has $197M in goodwill related to Heald. If sold for $197M, there would be no gain. I highly doubt that Heald is worth $150M or more when the market capitalization of CCi is near $30M.
Original deal was valued at $395 mil, though that was probably an overvaluation given Corinthian's desire to grow and stop stock price slide. Assume that with depreciation, brand problems, and sector-wide concerns, $150-$175 mil (rough estimate). Would adding 10K plus students and another brand be attractive to another umbrella for-profit company? Yes. Would private equity step in here? Maybe. It would take opening the books more fully, and this kind of transaction could not be done in a week. However, if the fundamentals are promising and a tentative deal could be put in place, then bridge financing, perhaps on a brand-by-brand basis, could be arranged. It would also help all of these smaller brands to get out from under the Corinthian label asap. Once a brand gets tarnished, it is very difficult to rehabilitate.
Heald will not be sold by Friday.
How much do you consider Heald to be worth?
Form a private equity standpoint, selling Heald and Wyotech makes sense. This capital could be used to satisfy debt and wind down Corninthian. The smaller colleges could then operate away from the tarnished brand, ensuring some longer-term viability.