There is no certainty over short time horizons. That's why I look at BPI over a longer time horizon - in this case a year. My reason for doing this is that it will take that long for:
The HLC to determine whether BPI's plan to meet "substantial presence" is adequate.
WASC to review the BLP resubmission for accreditation.
The DOJ investigation to make progress.
Other governmental investigations to move forward.
The class action suits from investors to take shape.
It would not surprise me if the students who were ill serviced by $200 in instructional spending don't go after BPI.
Sometime during the next year, the "Post Harkin" economics to reveal themselves (fewer students / more instructors, which will mean lower growth and profits (perhaps in next earnings call).
Other things may come out of the woodshed. The qui tam suit you referenced was ongoing and undisclosed upon the DOJ announcement. There is no way to know what other things are underway with potentially negative ramifications for BPI.
My experience has been that investors tend to evalaute a stock based upon its prior trading ranges, even when the economics of the underlying business have markedly changed, which makes the fall slower than would otherwise be expected.
- Accreditation is inevitable and you haven't provided a convincing argument to the contrary. Investors obviously disagree with you.
- Where did you get the $200 in instructional spending. The Harkin Report says $2,212 per student. It also says that BPI is one of the highest money spenders, per student, for a profit school. The majority of students have high praise for the school, the teachers and for what they've learned. Most of them plan on finishing their courses and graduating.
- We've already argued about the DOJ investigation and you haven't convinced me that the DOJ will continue to pursue it, much less than find anything illegal. As for the class action suits, those will take years to resolve.
- I've haven't heard of any other govermental investigations? Let's see your source.
- Investors already know that earnings will be lower and it's already priced in. Where have you been? Earnings for the 4th quarter is projected to be half of the 3rd quarter's earnings.
- You said other things may come out of the woodshed. That comment is worthless since both positive or negative could come out in the future and you obviously can't predict the future. What was you last prediction, $4 a share or was it $5. Either is laughable.
- Your last comment is baloney. Investors value a stock because of what they expect to happen in the future. Why do you think that the Dow and other indicies are hitting all-time highs? It certainly was not because of our current #$%$ economy but what they expect in the future. Keep in mind that your batting average is ZERO while my prediction for BPI's price action has been right on.
In December, 2012, the Department of Justice ("DOJ") declined to intervene in two qui tam suits brought against Bridgepoint Education, Inc. ("Bridgepoint"). Over the past year, DOJ has become more active in qui tam cases, intervening in cases brought against EDMC and ATI. DOJ's decision to not intervene in the Bridgepoint cases is a positive sign for the sector and suggests that although DOJ has become more interested in qui tam actions involving the sector, DOJ can be persuaded not to intervene.
I would not necessarily trot that out as good news. DOJ has it's own investigation going concerning the exact same admissions practices. The DOJ would have no reason to join the qui tam suit if their case was stronger. Remember, a qui tam is usually a case brought by a whistle blower. It is often very narrow with limited funding and discovery options. The DOJ has far broader investigative powers. The time to get excited is when the DOJ closes its investigation of BPI. Last I heard the DOJ investigation was ongoing. Check out EDMC if you want to see how this can end badly.