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K12, Inc. Message Board

  • lawwman718 lawwman718 May 18, 2011 5:47 PM Flag

    Georgia Concerns

    This seems like a backward step compared with the momentum for charter schools and could have a big impact on 2012 profits. Georgia funding had been approved for $5,800, up from the $3,500 that virtual schools were getting. Since K12 has 6,000 kids in Georgia, this means that a lower funding level will cost them $13.8 million in profit increase next year, since the $2,300 is just like a price increase. This year they are guiding to $0.48 per share and next year first call has them at $0.94. This funding reduction will negatively impact pretax EPS by about $0.40 or probably $0.25 after tax. This stock is already at nosebleed valuations, so I guess they will miss first call 2012 earnings.

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    05.17.11 State Supreme Court Ruling Could Place Georgia's Virtual Charters at Jeopardy

    A ruling by the Georgia Supreme Court has sent a chill through the state's virtual education supporters.
    In a 4-3 decision, the court struck down a law empowering the Georgia Charter Commission to approve and finance charter schools. The commission had the power to create charters even if local school boards objected.
    Georgia has a virtual charter school and several more in the pipeline. In 2010, after approving two virtual charter schools, but not funding the schools at a level many considered needed to make the schools viable, the charter commission increased the per pupil funding. This move was hailed by the virtual education community as a victory in making sure virtual schools receive appropriate funding.
    Now, with the recent court ruling, Georgia virtual school community is at a loss.
    In a post titled, "Supreme Court Ruling Puts Children's Futures at Risk," the Georgia Families for Public Education said this:
    "The Georgia Supreme Court ruled that state authorized charter schools are not special schools and the state does not have the authority to create them in the first place.
    "Georgia's online public schools, like Georgia Cyber Academy and Georgia Connections Academy are not part of this case. Still, our team will examine to see if this judgment even applies to our online public charter schools (for example, Georgia Virtual Academy, the online extension of Odyssey Charter School Kaplan Academy of Georgia and Provost Academy of Georgia) and work closely with the Attorney General and our own counsel to ensure the education of our children is met to the highest standards."

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