ESI likes to report earnings on Thursdays.
Here is ESI's press release on 2015's Q2 earnings date:
"CARMEL, Ind., July 20, 2015 /PRNewswire/ -- ITT Educational Services, Inc. (ESI), a leading provider of technology-oriented postsecondary degree programs, today announced that it intends to release 2015 second quarter results before the market opens on Thursday, July 30, 2015."
You will notice that the option with the largest open interest is the October 2016, $3 Call.
The open interest is 13,031 which controls 1.3 million ESI shares.
The next largest position is the July 2016, $2 Put.
The open interest is 1852 which controls 185,200 shares ESI shares. (These will expire worthless on Friday).
Option buyers clearly favor ESI surviving to October and closing above $3 on October 21st.
Option sellers are hoping for little to no volatility into October. (Good luck with that!)
If he buys another 9 million shares, he can be a Majority Owner (50%) and essentially run ESI.
What the heck. It's only another $18 million to own ESI.
Also, Zhang Yude is now officially an ESI insider so he had to file a Form 4.
"Form 4 is a United States SEC filing that relates to insider trading. Every director, officer or owner of more than 10% of a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 must file with the United States Securities and Exchange Commission a statement of ownership regarding such security."
2,964,702 ESI shares to be exact.
He just bought another 350,000 shares!
206,092 shares on July 1st, (601K shares traded on July 5th. Yude bought 34% of all shares traded!)
144,550 shares on July 5th. (295K shares traded on July 5th. Yude bought 49% of all shares traded!)
What's your plan, Yude?
Hmmm, I guess "under investigation" means guilty.
If so, Hillary Clinton is guilty, Donald Trump is guilty, the whole US Congress is guilty of ripping off the taxpayers by taking a high salary and perks and doing nothing, Starbucks is guilty because they are under investigation for not filling lattes to the top, etc., etc., etc., ..........
The number of companies and individuals that are under investigation at any one time in the US is in the hundreds of thousands.
Throw 'em all in jail, I say! (especially Congress)
There's no doubt that all the ED has to do is, as you say, "choke them to death". They can pull the plug at any time. But will they? I think they will hold off using the nuclear option until they see they cannot shut down ESI any other way.
I also think ACICS is more than a little irritated (I can't use the words I'd like to) with the ED and will not pull ESI's accreditation in August. They'd really like to say some choice words to the ED and not look like the ED's lap dog.
Anyway, we'll see. I'm both long and short, via options, and just want things to happen quickly with LARGE price swings.
Volatility = profits.
P.S. I am very rarely sad but sometimes mistaken.
You're right. I would expect at least one 13D next week if they are truly interested. Tuesday's volume was 429K so they should have picked up some then. With all the negativity, I'm a bit surprised we are hanging in the $1.80+ area. Guess that's the pivot point between the longs, the shorts, and the don't cares.
My dear dahn, the technique was not neutralization, the technique was equalization.
ESI = Enron? Let me count the ways it is not. 1,2,3,4,5,6,...
YOUR equalization technique has poor execution and no details.
and the number of times the government loses those cases.
"But critics argue that too often the administration’s focus on outcomes – both in the accreditation space and elsewhere in the higher education space – unfairly targets for-profit colleges and ignores similar intransigencies at other types of colleges and universities."
"Case in point: A new report from Third Way, a nonpartisan policy think tank in Washington, D.C., shows that nearly half of students enrolled in four-year private, nonprofit colleges aren’t graduating. And many of those who do graduate aren’t earning sufficient incomes even years after completion and are unable to repay their loans."
Federal Courts are notoriously SLOW to make decisions and the ACICS case will be no exception.
News Item: "a federal panel, the National Advisory Committee on Institutional Quality and Integrity, voted Thursday to shut down the largest accrediting agency (ACICS) of private sector colleges and universities amid intense criticism in recent years for loose oversight of educational institutions."
"The ruling is far from the final execution for the accrediting agency, which plans to appeal the decision, first to the secretary of education and then the federal courts."
Why is buying ESI stock now a smart move by the Zhangs?
Suppose they plan on offering, for example, $4 per share for ESI.
Every share they buy now below $2 reduces their cost of buying ESI by millions of dollars.
This is gonna be good!
The Zhangs must be up to something and it's likely they are either trying to buy ESI or take control of ESI with the ED apparently in the loop.
The ED reported that a buyout of ESI "fell through" but did not elaborate. My guess is the Zhangs want to buy ESI or become majority owners so they can get rid of the current management (very helpful) and get rid of the BOD (another helpful act). The fact that the ED is aware and monitoring the actions of the Zhangs implies that, they too would like a change of control and a change of management.
The Zhangs are buying as much of ESI as they can on a daily basis without sending ESI skyrocketing.
On June 15th, they bought 24K shares of the 219K traded, i.e. 11% of all shares traded.
On June 16th, they bought 132K shares of the 341K traded, i.e. 38.7% of all shares traded !!
On June 17th, they bought 104K shares of the 267K traded, i.e. 39% of all shares traded !!
The Zhangs have 2 priorities right now:
1) Buy as much of ESI as they can on a daily basis.
2) Work with the ED to gain control of ESI.
They are telegraphing what they are doing because they are required to file a 13D anytime they add more than 1% of ESI to their current position. They can only buy 240,000 shares and then they have to report. (see below).
What the Zhangs would like to see are a few very big volume days. They need news and it doesn't matter if it's good or bad. They might prefer bad news.
The Zhangs have a lot of free cash and would have no trouble posting a LOC that would make the ED happy.
This is going to be fun!
"Schedule 13D is an SEC filing that must be submitted to the US SEC within 10 days, by anyone who acquires beneficial ownership of more than 5% of any class of publicly traded securities in a public company. A filer must promptly update its 13D filing to reflect any material change in the facts disclosed, including the acquisition or disposition of 1% or more of the class of securities that are the subject of the filing."
Expect a very, very lengthy court fight if the ED tries to shut down ACICS. Meanwhile, ESI will continue operating normally.