While I am not an expert and have no first hand knowledge on ESI their schools or their business, I do have an informed opinion if you care to listen.
The lawsuits that have been filed are from post-Enron dogpiling firms who throw together a boiler plate lawsuit everytime a stock takes a large dip and there is the slightest hint of contorversy. IMHO they have no more insight into the grand jury investigation than you or I. In the end if there were any payout it would all end up in the lawyers' pockets not the shareholders'. The last shareholder settlement I got was for about 25 cents. You can bet the law firm that represented the shareholders got a bigger check than me.
IMHO if the overiding issue was related to Federal Financial Aid, the DOE (Department of Education) OIG (Office of Inspector General) would be involved and not the FBI. The OIG can and does prosecute criminal cases. Additionally, only eight of the ITT campuses were visited. The vast majority were not. While I do not know IIT's structure, my guess is that each of the campuses has it's own DOE authorization to offer financial aid. The campuses that were not visited would probably not not be affected in any case.
The truth is nobody can predict what will happen based on what is currently known. Until more information comes out of the grand jury investigation, it's wait and see and the market will value acordingly.
As to the quality of the programs, my guess is that ITT is much like any college, public or private. What one gets out of the college experience is more related to how one applies onself than any other single factor. Proprietary colleges generally offer a more career/technically focused curriculum. They also offer more individualized instruction and cater to a more diverse spectrum of learning abilities than traditional colleges.
As a former faculty (not for ITT),I do know that most proprietary schools that are accredited as degree granting institutions are more tightly regualted and receive more oversight than public and non-profit colleges. They have a different mission from traditional colleges and for many students it is the right choice.
Incidentally(shorts)if you really think that the market is driven by the yahoo message boards and (longs)that all the tripe that people put out here is worth listening to you need to get a clue. From what I've read here, about 10% makes any sense. Good luck sorting through the other 90%.
My best wishes go out to the shareholders (and the company) for a positive and expeditious resolution.
Because I do not trust any company. I tend to rely on charts. Everything is relative. I get into companies when I think they have more possibilities of going up than down. When a company with an excellent long term chart, like ESI, with 95% institutional ownership, falls by a big percentage and breaks the 200 EMA in the weekly, in my experience they tend to recover. Also, this is a psychological game of greed and fear. At bottoms fear tends to be prevalent, at tops greed dominates. Now fear seems to be in control. IMHO ESI probably has big problems, but I believe that the reaction down has been overdone. Yesterday the biggest options open interest positions for August were $55 calls.
Something I wonder about is if these boards really influence anybody. WE all want real info, and that is hard to get.
No offense taken or intended. We agree on many frontsmy friend. Good luck on your position. My best wished for a positive outcome for you and all associated with ESI.
I'm off for now-untill something material develops.
Thank you for your reply. You did not offend me in any way and I hope not to have offended you either. I think your posts are reasonable, and that is more than can be said of many people's posts in these boards. It seems to be obvious that we do not agree with each as to what tools are useful to read the market. I nevertheless respect your opinion and read it with interest to see if I can learn something I do not know- which is a lot. The only thing that bother me here is the people who insult others. I have seen words like idiots, morors, etc. in posts here too often.
I agree with you about inventing bad news or using scare tactics. I am long this stock and I have consistently supported the long side. I may still be wrong but I think ESI is going up. Honestly I do not know what the Fed investigation means for a company. I can only speculate and my personal feeling is that the fall is overdone.
I just do not know what fact is at this point. I do not trust the fundamental information put out by the company. The only apparent fact is that there seems to be an investigation and the price of the stock fell 43.9%. Everything else is emotion.
Wow, I can't believe you are saying or believing that line of reasoning. Show me an industry represented on the market where the stocks do not track especially in response to economic conditions or significant events.
I have no axe to grind with technical analysis except that at the very core all methods use historical data to try and predict the future. I agree that some of the indices are very helpful tools.
From time-to-time there is actually information on the board that is based on data and fact. I do not exclude the discussion of the technical indices from this group.
What I take exception to is when folks just invent bad news and then go on to speculate about it and then even extend it to an entire industry. Gosh why stop there? If one industry is bad they must all be! Those damm capitalists again, right?
Look, I apologize if I offended you personally-that was not my intent. My message was to everyone who cared to read the string I had started.
But honestly, look back at all of the wild speculation from many people(not just on this board or this industry). People jump to conclusions, make assertions and comparisons between events and companies that are not based on anything but the most remote associations and are sometimes just not correct. Often what is incorrect or just specualtion is presented as fact.
Perhaps I'm too quixotic on this and should accept things here for what they are. Thanks to all the reasonable folks on this board for their comments and discussions.
Would you please define what in your opinion are the facts and fundamentals of this case. I am not sure what you mean.
Unless you have some insider info - and I do not have any, you are speculating and everything is a matter of opinion. In the end some will be right and make money and some will be wrong and lose money, or maybe the other way around.
I do not believe ESI is unique in the way it handles anything in the business. If ESI is doing something, so are probably many of the other schools. DO I know for sure? of course not, but there tends to be a sympathetic reaction in an industry when something good or bad happens to a company, and I believe that to be a fact. Also, look at the charts of the other schools. Why do they follow a similar path? We all know that this is like trying to read tea leaves, but that is the nature of the business. Personally I tend to follow charts. Some people do not believe in charts. What can I say!
you should be paid as a consultant for an investor who wants to make a nice return on an investment in esi. the odds are at 80 to 20 that esi recovers. that 20% chance that things go really bad represents the risk that could keep esi down for another month or 4 months. however , i believe that the chances are 80% that these pr0blems are resolved.
My point has been that this stock is probably going to have its ups and downs until the Grand Jury provides more information. Until they do the shareholders will have decide to hold their breath or minimize their risk.
Someone has suggested that 8 campuses were closed. Based on the news I read this is not correct. 8 campuses are included in the investigation. Just to put things in perspective, I believe that ESI has over 50.
Someone else has suggested that the FEDS often use a sledge hammer when fly swatter would do. I do not want to minimize the important nature of this investigation, but that is also absolutely true.
The fact that the FBI and the Postal inspectors were involved in the investigation suggests to me that the investigation is not related to financial aid. If it were I believe that the OIG would have been invloved during the campus visits and that the records that were obtained would be financial aid and other financial records. I don't recall seeing amy mention of those in any of the press coverage.
At the end of the day we will find out the results of the investigation. It will either be good news or bad news depending on where one has one's money. For the sake of the shareholders, employees and students I hope it ends in ESI's favor.
Whether or not the money ends up in the lawyers' pockets or the shareholders really misses the point. There will be costs and negative publicity that will affect the stock price. Not everyone KNOWS how cases will turn out or if they even have merit. Either way, it costs to defend and/or settle a suit. The government often uses over-the-top heavy-handed actions, but I don't understand why they would close down 8 sites for no reason. Just because they only shut down 8 or 10 or however many could just be a result of sampling for possible errors or irregularities. Who knows? I am purely in a gamble situation here. No basis for it, just had a few dollars to speculate with. Knowing my background, I am sure to get burned.
dcnanney says .....>>>>The government often uses over-the-top heavy-handed actions, but I don't understand why they would close down 8 sites for no reason. Just because they only shut down 8 or 10 or however many could just be a result of sampling for possible errors or irregularities. <<<<<<
the reality is that classes have not been closed at the campuses visited by the feds
**********see below********* beware wolves ( shorts) in sheeps clothing( implying with words a long position but finding a way to dump on the stock none the less.
Classes resumed Thursday at 10 campuses of ITT Technical Institute in eight states where authorities a day earlier served warrants and searched records in an investigation that spooked investors in the chain of technical schools.