Reflexive Thought and Economics (Why People Are Holding)
By many measures, Apollo Group remains in freefall. Its cash pipeline is narrowing with each quarter despite increasing advertising. And there are several huge lawsuits coming down the pike. It continues to face government scrutiny even after the 2010 GAO Report and the 2012 Harkin Commission. And the University of Phoenix brand has become the butt of John Stewart jokes. So why are stockholders running toward the exits? My hypothesis is because of irrational behavior as explained by cognitive scientist Daniel Kahneman. This is why people why gamblers will continue to lose at the table to win back what they've lost. Those who are thinking clearly are shorting Apollo Group or are pumping and dumping (or working for Apollo Group).
I was looking at the 10 year charts and enrollment data. What happens to APOL stock price as revenues continue to be reduced from the government pipeline? APOL can do mass layoffs, sell off property, change leadership, offer a buyback, and increase advertising, but those are short-term fixes. Teacher pay is already as low as it can be. Without students, especially veterans and working class folks, Phoenix is heading towards its demise.