So your view is that ESI runs out of cash in July (2 quarters) and then has to do a large equity offering? Interesting. But ESI has a large chunk of cash on the balance sheet now and the 2009 RSA only seems to be a $35 m exposure that would come into play in 2014 (not 2013). ESI cash now is well over $100 million. I guess it comes down to student enrollment figures. I listened to the JP Morgan webcast presentation made this past October. ESI managers said that they are cutting cots by $50 m. This is going to generate a big number in cash savings I suspect. My analysis does not seem to indicate that any looming cash crunch, but if there were one, it would not be very meaningful. Any further thoughts?
I think ESI should look into ED X as a way of growth / expense cutting. Virtual classrooms are going to be the next growth leg as most aggressive colleges are moving ahead and will be the BIG thing.
Keep in mind birth demographics were way off in the 90's so dont expect anything big with any of these schools. Inflation will play big from here on and at 9.4 % currently , people are not going to be able to afford.
mike, unfortunately I place no value on any Citibank investment opinion. They should have said Sell a long time ago. Relying on Wall Street analyst opinion is low added value based on my experience. I am looking for someone who has their own view, regardless of what the Wall Street dopes think, and someone who who has crunched the numbers. Can I ask....have your read all the ESI filings with the SEC? What did you think about my comments regarding the 2007 RSA, the 2009 RSA, and the PEAKs programs?