I completely agree with your cynical assessment of government.
I also agree that ESI will not be shut down in the foreseeable future (about 2 years).
That's actually good news! If they thought ESI would shut down soon, why bother asking them to change?
ESI will eventually comply with their request, putting forward a "good faith" change.
edu thought that might be a possibility given the political pressure on any entities appearing to be friendly to for profits.
If KHLU wants to acquire or control ESI, there is no impediment.
KHLU could buy ESI outright for $4 per share (less than $95 million).
They pay off the debt.
They acquire real estate worth $125 million (it's likely worth more).
It's important to note that ESI has a book value of $6 per share. This includes the $4 per share of cash from the ED LOC.
Plan 1: ESI may be worth more as a real estate play than as a school. The ED can use the LOC to teach out the current students and KHLU has an instant real estate portfolio.
Plan 2: Buy ESI. Teach out the current students (without using the LOC). Close the school. Get back the $90 million LOC. Use the real estate to provide income.
Plan 3: Start a new for profit school without all the baggage (SEC, CFPB, etc.).
** Everybody wins. ESI shuts down. KHLU gets an instant US real estate portfolio and maybe a school.
There's no other reason for KHLU to be involved. IRONICALLY, if they buy ESI for $4 per share, they make a "profit" on their 2 million share investment.
My guess is they will move soon on whatever plan they have in mind.
From the ED website:
"Change in ownership for publicly traded corporations:
For publicly traded corporations, a change in ownership and control occurs when:
• a person acquires ownership and control of the corporation such that the corporation is required to file a Form 8K with the Securities and Exchange Commission notifying that agency of the change in control..
A controlling shareholder is a shareholder who holds or controls through agreement both 25% or more of the total outstanding voting stock of the corporation and more shares of voting stock than any other shareholder.
A controlling shareholder for this purpose does not include a shareholder whose sole stock ownership is held as a U.S. institutional investor, held in mutual funds, held through a profit-sharing plan, or held in an Employee Stock Ownership Plan.
From the ED website:
"if a school’s accrediting agency loses its recognition from the Department, the school has up to 18 months in which to obtain accreditation from another recognized agency."
Here is a small list of some US Corporations owned by foreigners. Thus, the answer to your question is yes.
Here are some of America’s most famous brands currently held in foreign hands:
•Budweiser, now owned by Anheuser-Busch InBev N.V., which is based in Leuven, Belgium
•Alka-Seltzer, now owned by German company Bayer Schering Pharma AG
•Ben & Jerrys, now owned by British-Dutch Unilever
•AMC theaters, now owned by the Chinese
•7-Eleven, now owned by the Japanese company, Seven & I Holdings
•Woman’s Day Magazine, now owned by the French company, Hachette Filipacchi Médias, S.A
•Purina, now owned by the Swiss company, Nestle
•Gerber, now owned by the Swiss pharmaceutical giant, Novartis
•Firestone, now owned by the Japanese Bridgestone Corporation
•Citgo, now owned by the government of Venezuela
•French’s Mustard, now owned by Reckitt Benckiser, a British conglomerate
•Frigidaire, now owned by Sweden’s AB Electrolux
•The Plaza Hotel in New York City, now owned by Israeli billionaire Yitzhak Tshuva’s El-Ad Group
•Trader Joes, now owned by German billionaires Karl and Theo Albrecht
•Dial soap, now owned by Henkel KGaA, based in Dusseldorf, Germany
•Sunglass Hut, now owned by Italian eyewear seller Luxottica Group
So the resident genius says ESI's fair value is $1.25.
The resident short, edu, says it's zero.
I say it's closer to $3 with good news pushing it higher.
Who cares who is correct?
The easy trade is buy near $2 and sell near $3. Rinse and repeat.
Just watch out for those spikes!
Dahn, if you weren't so obsessed with negativity, you would see that buying near $2 and selling above $2.50 is very profitable.
Likewise, if that's your preference, selling short above $2.50 and buying back at $2 is also very profitable.
As others roll in the dough, you wallow in the mud with the Limpwillys.
Drew the Shrew comes to edu's rescue with his usual impeccable logic and knowledge of facts! I'll bet edu is relieved about that.
Edu, you are dreaming. You are wishing so hard that ESI will go bankrupt that you are creating scenarios that just don't exist. The ED admitted it was a mistake to bankrupt COCO and they had no intention of doing so. No one will be allowed to recreate that disaster. Any action will play out in the Judicial arena.
Edu, You posted this "info" a few days ao and here it is again. I'll respond the same way I did last time.
"“was keen to prove its mettle and its importance before the end of the administration as well, which could mean additional high profile investigations yet to be announced.”
How is another bogus enforcement unit going to "prove its mettle" if it rehashes what one of the other harassment units have already done? If this "experienced FTC attorney" decides to attack ESI, most of the world will shrug and say "this is all we get?" More rehashemnt of the same issues the SEC, ED, and CFPB have already brought up?
The other 3 "investigations" have been ongoing for YEARS! So this "experienced attorney" is going to go to the back of the line and wait years for some resolution of whatever dirt he can dream up??
Again, I'll say the same thing as last time. Attacking ESI again would just bolster the rest of the for-profit schools since attacking ESI again and again would suggest that there isn't any dirt that's worth digging up on anyone but ESI.
"Participants also speculated ...". This is news? Speculation? I'm speculating that whatever they do, it won't be news for long.
Boardman, you make a good point. Why did they file a 13D instead of a 13G?
"The 13G filing is considered a more passive version of the 13D and has fewer reporting requirements than the 13D. Activist practices are not permitted by 13G filers unless they refile a 13D."
Although Mr Zhang did not indicate any activist intentions in the 13D, they may be contemplating something in the near future. A 13G filing would have sent the wrong message to the market and Mr. Zhang would have been accused of hiding any activist intentions.
They buy all the other research firms' research and average them together. Given that only two research firms I know of are covering ESI, I guess both of them changed from sell to buy.
I just posted this info to irritate the ESI haters. It's completely irrelevant. Just as all of the other info, suspicions, hate, love, guesses, desires, and speculation is irrelevant.