June 9, 2010 – Short Sellers Turn an Instant Profit in For-Profit Education

Featured Trades: (APOL), (COCO), (DV), (CECO), (BPI),
(EDMC), (APEI), (WPO), (CPLA), (ESI)


3) Short Sellers Turn an Instant Profit in For-Profit Education. One of the great things about the Internet is that when you put something out there, often what comes back at you is ten times better. Last week I posted a piece on how hedge funds were zeroing in on the for-profit education companies as potential shorts (click here for the piece). I received dozens of pitiful e-mails from victims of this scam detailing how they had been ripped off. In an sobering lesson on how the world works, a reader also sent me the list below of political donations these companies made to US senators last year. Their obvious goal is to keep the free lunch coming by maintaining the status quo, whereby hapless students load up on government loans to buy high priced degrees from these dubious institutions, which often prove worthless in a job search. By the way, paid subscribers who get the early edition of my daily letter were able to make an instant 10% on my tip. Don't you just love the Internet?

Apollo Group Inc. (APOL) $560,000
Corinthian Colleges Inc. (COCO) $460,000
DeVry Inc. (DV) $460,000
Career Education Corp. (CECO) $360,000
Bridgepoint Education (BPI) $270,000
Education Management Corp. (EDMC) $270,000
Career College Association $250,000
American Public University System (APEI) $240,000
Kaplan Inc. (WPO) $200,000
Capella University (CPLA) $60,000
ITT Educational Services Inc. (ESI) $30,000
Concorde Career Colleges Inc. $20,000
Total $3,180,000