COCO down to around $30 mil market cap. This seems to be about the value that markets see left.
DV up, LOPE even, STRA even. All against big declines across the sector. With high market caps, one or more of these groups may be in the talks to buy some of the COCO brands. They could add significant students and cash flow--investors love this. Everest may be too tarnished, but Heald and Wyo may be valuable to others in the sector.
Students should go to rop state ran classes for a lot cheaper price. They go to these for profit schools because they are heavily advertised. The for profit could be good for a percentage of students if they became ethically ran but they aren't and they wont. Too bad.
That makes sense, but I think it's too late for CCi. The vo-tech type jobs typically start with fairly low pay, depending on the field, and require small classes and extensive equipment. Another big issue is gainful employment and escalating college cost. The public simply don't understand that public schools are cheaper because their tax dollars are subsidizing the. We can't compete on price and will always get negative publicity and increased scrutiny because of it.
14382: "So most of the 2 year schools will be on the verge of disappearing, the concept is unsustainable."
You make a really good point. With online education, and even MOOCs to a degree, even though they're not good at retention, students may decide it's not worth their time to come to a class. General education is kind of a joke at CCi schools, even Heald, but why not just do hands-on vocational training and nothing else? You can't get hands-on training online. Some of the better allied health students resent having taken the time to get a degree when they see colleagues at work getting the same job with a nine month certification.
You must be nuts to buy anything in this sector right now - with the federal regulation changes looming, this industry might be changed forever over night - if they cut aid funds, who will be paying for for-profit education - pretty much nobody. the math is simple here and the street knows this, all schools that heavily rely on the federal aid will be annihilated from the wall street perspective
You consider this a burgeoning industry?
A couple of players emerge here (besides Apollo) and they will grab what is valuable in the brands that are floundering. This happens in most burgeoning industries.
Note the spread between COCO/EDMC and others in the sector. This suggests what might happen in the next week from market activity. EDMC also a possible buyout candidate at that price.
Here is your stock to short, NYSE:ESI $16.41 Down $0.63 (3.70%), they are worse than COCO yet their stock held up until recently. Once the funds are cut off they are pretty much hosed (they came up with a scheme to finance students on their own, but with a 65% default rate this plan fell apart quickly and they are saddled with all bed debt that they initially did not report to the shareholders correctly)
Google a bit about WYO brand, you'll find 1000s of complaints, I am not sure if I'd want that brand, I'd call it University of XYZ and start from scratch. ESI is spiraling down, APOL is a bit more stable but still going down, DV is probably in the best position here but they have issues too. ESI will melt down as they have similar concept as COCO, same issues, accounting magic, dubious loan booking, etc. At this point in time pretty much everyone figured out that a 45K AA degree in accounting has no ROI, I am talking about about pretty much every prospective student being aware of this. So most of the 2 year schools will be on the verge of disappearing, the concept is unsustainable.
EDMC is also in the toilet...too bad
Sorry DV up ESI and APOL down
DV and APOL down...