Todd Nelson, the chairman of Perdoceo Education Corp., one of America’s largest for-profit college companies, has sold a huge volume of his shares in the company in recent weeks — even as Perdoceo has been telling investors that things are going well.
Nelson has frequently been featured on this website because of his outsized role in running predatory colleges. Before serving as chairman and, previously, CEO, of Perdoceo, he ran two other giant operations — the University of Phoenix and now-demised Education Management Corp. All three chains ran into major law enforcement issues because of deceptive and illegal recruiting practices and other abuses that occurred on Nelson’s watch.
Now, Bradley Safalow, CEO of research firm PAA Associates, has produced a report asking why Nelson, as well as other senior Perdoceo executives, have recently sold so many shares of Perdoceo, which operates two big online schools, American Intercontinental University and Colorado Technical University. Safalow concludes that Perdoceo “faces enormous secular headwinds which we expect to manifest themselves in the form of higher marketing costs and declining new student starts over the next 12-24 months,” as well as “a great deal of regulatory tail risk which could change the earnings profile of the company almost overnight.”
Safalow acknowledges in the report that he has a short position in Perdoceo, meaning he is betting the share price will come down. But the information he documents and...
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