We are now delisted!
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For a stock that was priced at $30/share in January 2012 - this is a stunning turn of events. Delisting is a way to dodge the regulatory rules set forth by the SEC for a publicly traded stock. It's just the first of many dominoes to fall as the company restructures and/or ultimately closes its doors. But those shareholder lawsuits? Yeah, those are still going to go forward. Fiduciary negligence is a thing.
Delisting means that EDMC can be even less transparent than they have been. I continue to be amazed by how little press the "4profit zombie college crash" has received. But I suppose that they get so much ad revenue that they won't report this news.
it's interesting how delisting removes leadership from being personally and financiall accountable to the lawsuits. well played, ed.
What happens to the numerous lawsuits from the investors? Wouldn't that work in their favor?
Could going private be a good thing financially?
Unfortunately basically yes. At this point the stocks are considered Penny Stocks and can still be traded off the market with pink slips. Sometimes it costs more in brokerage fees to dump the stocks than it is even worth. Basically the options are to sell prior to delisting, or just hold onto them and hope for the best as you can still exercise voting rights dependent upon if the stocks held are preferred or common stock.
What happens to the stockholders when they go private? If they don't sell their stock before 11/15, they are SOL?
Actually EDMC is not yet delisted. November 15th is the expected date that the stock will actually be delisted. So here are the real reasons that EDMC chose to do this.
By delisting the company will no longer have to spend capital on meeting the SEC's needs which will save millions.
The board of directors will be disbanded as once the company is privately held by KKR there is no one needed to appease the shareholders. Millions saved once again.
Once privatized EDMC will no longer need to follow the rules of SOX (Sarbanes Oxley) which also costs millions for financial reporting and accounting. In EDMC's case approximately $12 million per year.
In addition to all of these this will also take all of the negative financial information out of the light of the objective opinions of the media. Also allowing for any kind of restructuring to occur much faster and with less issues.
The only bad things about this are that after Q1 FY15 there will be no insight as to how the company is doing financially as that should be the last 10-Q released to the public.
So as a recap the benefits far outweigh the costs of delisting. I hope this was straight-forward and unbiased as I attempted to make a neutral informative analysis for everyone that visits this site.
they're going private
who is to say it's still not going to "shut down" or have "layoffs".
It was they only move.
They're cowards.
It was the right move