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K12, Inc. Message Board

  • lawwman719 lawwman719 Apr 15, 2011 11:23 AM Flag


    In a private placement, LRN places 4 million shares with an investment fund and raises $125 million for expansion!! Great company!!

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    • I agree that this is good news despite the dilution of the shares. On the last conference call Packard said that he had never seen an environment with so many opportunities. He was not specific but I assume that he meant both business and acquisition opportunities.

      LRN has 35M in cash and no debt. While that is a solid cash balance it might be a little light for all the investments they may have to make to ramp up their businesses. The overseas opportunities alone are going to need a lot of cash and may not pay off for awhile.

      Even a brief glance at the Technology Crossover website shows that these guys know how to identify solid business models. They have invested in Netflix, Groupon, Facebook, etc. etc. Being added to that list is certainly a positive.

      Technology Crossover will also add another dimension of management expertise. There may be synergies with their other companies. Certainly the contacts obtained will be a plus.

      K12 is in a great spot having to differentiate among a wide range of great places to invest and grow. This stock is still under the radar of wall street with little analyst coverage despite their sterling business model and execution. I think that many analysts lump it in with the online colleges. When the street finally realizes what is going on here the stock will sell for a much higher multiple. This investment will push that process along.


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