1. What is the impact to ESI if the sales do not occur? This was at $14 so seems like investors are writing off ESI of the sales do not happen.
2. Why would ESI walk away from a potential deal if there are no other propsective buyers? They still had a chance if they stuck with it until Sept 15 but instead chose to termintate it?
ESI did not cancel the deal. They were hoping to close the deal. But things have changed since May. Other schools are putting their campuses on sale too. So, the new deal will be worse than May deal.
Right now, no one wants to deal with this stock until resolution on many of these issues - Sales/Lease of properties, Regulatory outcome, Legal issues, Earning restatements, Future Earnings, Balance Sheet etc etc.
What you saw today was some big holders bailing out. Backrupcy is definitely outcome. It seemed very distant on Friday morning. The other item could be dilution. Stock could get diluted a lot (if they decide to raise the money).
Overall, not a good time to be in ITT. If you bought today, you may find some quick returns. But as investment, its very very risky.
Did you look at the Merrill report. I think, few more brokerages will downgrade in next few days. It may be time for Merrill to upgrade it. Their price is $16. its below half of it now. Either, they need to revise their research or upgrade the stock.