If ESI remains a going concern and continues to secure Title IV funds, ESI is a no brainer investment at these levels. Existing cash levels should give sufficient liquidity to stomach increased leverage coming onto the balance sheet from third party loans. Company will need, however, an additional financial buffer that will put regulators at ease and that is the reason why selling a leasing back a portion of its properties makes sense.
However, if Title IV funds are restricted or delayed for any reason, then at that point, going concern is no longer on the table and investors must then ask what is the liquidation value of the company based upon the real-estate that is owned. Does anyone know how many of their properties are owned versus leased? That is the key factor in determining downside protection. Given how old ESI is, I have to believe that some of the real-estate properties owned is under-stated on its balance sheet. I don't understand why it takes sooooo long to file financials. ESI auditors should be in disgrace.
my worst case scenario starts with a raid on corporate HQ by FBI and the feds. It then spirals into indictments
with the CEO fleaing to South America. In the end all ITT schools are closed due to Ebola.